Refer to Figure 29-1. Currency speculators believe that the value of the euro will increase relative to the dollar. Assuming all else remains constant, how would this be represented?
A) Supply would decrease, demand would increase and the economy moves from A to D to C.
B) Supply would increase, demand would increase and the economy moves from D to A to B.
C) Supply would decrease, demand would decrease and the economy moves from B to C to D.
D) Supply would increase, demand would decrease and the economy moves from C to B to A.
D
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In the short run, if a perfectly competitive firm is producing at a price below average total cost, its economic profit is:
a. positive. b. negative. c. zero. d. normal.
In 1972, one could buy a bag of chips, a pound of hamburger, a package of buns, and a small bag of charcoal for about $2.50 . If the same goods today cost $6.00, then which pair of CPIs would make the cost in today's dollars the same for both years?
a. 60 in 1972 and 150 today b. 65 in 1972 and 156 today c. 75 in 1972 and 160 today d. 90 in 1972 and 145.8 today
"Monopolistic competition is literally a kind of competition. Hence, there is no deadweight loss in a monopolistically competitive market."
A. The statement is incorrect. B. The statement is by definition correct but empirically incorrect. C. The statement is correct. D. None of the answers is correct.
A decrease in the stock of capital will cause the
A. production possibility frontier to shift outward. B. economy to move closer to its production possibility frontier. C. production possibility frontier to shift inward. D. economy to move down the production possibility frontier.