A Decrease in the Supply of Dollars on the Foreign

question 16

Multiple Choice

A decrease in the supply of dollars on the foreign exchange market,all else equal,will result in:

• A)appreciation of the U.S. dollar and depreciation of the foreign currency.
• B)appreciation of the U.S. dollar and appreciation of the foreign currency.
• C)depreciation of the U.S. dollar and depreciation of the foreign currency.
• D)depreciation of the U.S. dollar and appreciation of the foreign currency.

Evaluate the effect of changing interest rates on financial outcomes.

Understand the concept of the time value of money.

Calculate the required savings for future goals.

Understand the impact of frequency of compounding on investment growth.

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Definitions:

Producer Surplus

The difference between the amount producers are willing to accept for a good or service and what they actually receive, due to market prices.

Tax

A mandatory monetary payment or different kind of tax levied on taxpayers by government entities to support government expenses and various public services.

Consumer Surplus

The difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually do pay.

Producer Surplus

The discrepancy between the price at which producers are inclined to sell a product and the actual price they get, frequently viewed as an indicator of the well-being of producers.