If American demand for purchases of Mexican goods has increased, how would you expect the equilibrium exchange rate in the market for dollars to respond? Support your answer graphically
What will be an ideal response?
If Americans are demanding more Mexican goods, they must trade their dollars in the foreign exchange market for pesos. This increase in the supply of dollars is represented by the shift to the right of the supply curve for dollars below. As the supply of dollars increases, the equilibrium exchange rate falls (the dollar depreciates).
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In light of higher gas prices, Skip Miles asks himself if it's worth keeping his 10 cylinder Chevy Suburban. His concern is ultimately about
A) engineering efficiency. B) economic efficiency. C) technical efficiency. D) environmental efficiency.
The main function of the 1997 Stability and Growth Pact (SGP) was to
A) exclude a highly indebted EMU country B) enhance cooperation between France and Germany. C) make the Euro a weak currency. D) distribute the Euro banknote among European central banks and to create a timetable for the imposition of financial penalties on countries that fail to correct situations of "excessive" deficits and debt promptly enough. E) determine specialized penalties for each member nation.
According to the figure shown, if Starbucks expands in the market, then Dunkin Donuts should:
This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts. Both companies are trying to decide whether or not to expand in an area. The area can handle only one of them expanding, and whoever expands will cause the other to lose some business. If they both expand, the market will be saturated, and neither company will do well. The payoffs are the additional profits (or losses) they will earn.
A. also expand their business.
B. not expand.
C. give an ultimatum.
D. None of these statements is true.
Absolute advantage is irrelevant, because knowing the absolute number of labor hours required to produce a good does not indicate if a country benefits from trade
a. True b. False Indicate whether the statement is true or false