Suppose That an Increase in a Nation's Income Causes the Nation's

question 41

Multiple Choice

Suppose that an increase in a nation's income causes the nation's residents to buy more domestic and foreign goods.Given this,if U.S.residents experience an increase in income,but Mexican residents do not,it is likely that,ceteris paribus,

• A) both the U.S.dollar and the Mexican peso will depreciate.
• B) both the U.S.dollar and the Mexican peso will appreciate.
• C) the U.S.dollar will depreciate and the Mexican peso will appreciate.
• D) the U.S.dollar will appreciate and the Mexican peso will depreciate.

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Definitions:

Accommodation

In psychology, the process of adapting cognitive schemas in response to new information.

Existing Schemes

Preexisting cognitive structures or frameworks in the mind that help individuals organize and interpret information.

Modify

To change or alter something, often to improve it or to adapt it to different conditions.

Cognitive Development

The process of growth and change in intellectual capabilities such as thinking, reasoning, and understanding.