Suppose that the current exchange rate between the dollar and peso is $1 equals 11 pesos. If the exchange rate changes to $1 equals 9 pesos, which of the following is TRUE?
A. The peso depreciates and U.S. imports from Mexico become cheaper.
B. The dollar appreciates and U.S. exports become cheaper.
C. The peso appreciates and U.S. imports from Mexico become cheaper.
D. The dollar appreciates but the peso values of U.S. exports stay the same.
Answer: C
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a. continued to make only mortgage loans b. began to make riskier loans in areas such as speculative land development c. developed new loan markets which allowed them to prosper and expand d. began to merge with commercial banks e. lowered interest rates to attract new depositors
In the classical view of the credit market, a rise in saving produces a rise in investment via a
A) rising interest rate. B) falling interest rate. C) rising price level. D) falling price level.
Initial empirical evidence regarding the Phillips curve caused it to be ______ in the 1960s.
a. widely rejected b. widely accepted c. thoroughly revised d. completely abandoned
Increases in the productivity of labor tend to
A. increase the marginal revenue product of labor and the wages employers are willing to pay for any given amount of labor. B. decrease the marginal revenue product of labor and increase the wages employers are willing to pay for any given amount of labor. C. increase the marginal revenue product of labor but have no effect on the wages employers are willing to pay for any given amount of labor. D. decrease the marginal revenue product of labor and the wages employers are willing to pay for any given amount of labor.