Assume That the Vertical Axis of the Graph for the Foreign

question 73

Multiple Choice

Assume that the vertical axis of the graph for the foreign exchange market measures the exchange rate in euros per dollar. As the exchange rate rises

• A) American products become more attractive and more dollars are desired.
• B) the euro can buy more dollars.
• C) American goods become less attractive and fewer dollars are demanded.
• D) the dollar depreciates against the euro.

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Definitions:

Shortage

The amount by which the quantity demanded of a product exceeds the quantity supplied at a particular (below-equilibrium) price.

Market

Any institution or mechanism that brings together buyers (demanders) and sellers (suppliers) of a particular good or service.

Majority Voting

A decision-making process where the choice that gathers more than half of the votes wins, commonly used in democratic elections and organizations.

Public Good

A product or service that is provided without profit to all members of a society, either by the government or a private individual or organization.