An Increase in the Price Level in Japan Relative to the Price

question 105

True/False

An increase in the price level in Japan relative to the price level in the United States will shift the demand curve for dollars leftward and the dollar depreciates or becomes weaker.

---

Definitions:

Production Possibilities

Different combinations of goods and services that an economy can produce efficiently with its available resources and technology.

Diminishing Returns

The principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Marginal Product

The increase in output resulting from a one-unit increase in the input of a production factor, holding all other inputs constant.

Marginal Product

The additional output resulting from one more unit of a given input, holding all other inputs constant.