One effect of a stronger dollar is
A) an increase in U.S. exports and a reduction in U.S. imports.
B) a reduction in U.S. exports and an increase in U.S. imports.
C) an increase in net exports.
D) an increase in both imports and exports. The effect on net exports is uncertain.
B
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If price exceeds average variable cost but is less than average total cost, a firm
A) should shut down. B) should further differentiate its product. C) should stay in business for a while longer until its fixed costs expire. D) is making some profit but less than maximum profit.
According to purchasing power parity, the relationship among the domestic price (P), the foreign price (P ), and the nominal exchange rate (e), can be written as
A) P = e - P . B) P = P - e. C) P = eP . D) P = e/P .
The AD curve shifts to the left with a __________ in government purchases (G) or a __________ in taxes
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
If a monopolistic competitor is producing an output for which marginal revenue is $40 and marginal cost is $32 to maximize profits the firm should
A. decrease the level of output. B. keep the level of output constant. C. continue to make $8 per unit. D. increase the level of output.