Explain the forces that can cause an exchange rate to change.
What will be an ideal response?
Anything that can cause the demand or supply of a currency to change will affect the exchange rate. In addition, governments can intervene in the exchange market to cause a depreciation or appreciation of their currencies. If a currency is allowed to float with supply and demand, a decrease in interest rates, for example, can cause global investors to reduce their purchases of that country's bonds and cause the demand for that currency to fall, causing it to depreciate.
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At $10,000 of disposable income, Audrey's consumption expenditure was $11,000. At $20,000 of disposable income, Audrey's consumption expenditure was $19,000. What is Audrey's marginal propensity to consume?
What will be an ideal response?
Which of the following is true in the long run?
A) Total cost equals fixed cost. B) Total cost is constant. C) All costs are variable. D) Marginal cost equals zero. E) None of the above is true in the long run.
When a consumer moves from a lower to a higher indifference curve, the marginal rate of substitution automatically increases
Indicate whether the statement is true or false
The market and public sector are similar in that
A) there is competition among the participants in both sectors. B) the resources used in both sectors are scarce. C) the participants in both sectors react to incentives. D) All of the above are true.