When Fewer Units of a Foreign Currency Are Required to Buy

question 74

Multiple Choice

When fewer units of a foreign currency are required to buy one dollar, the currency is said to have__________with respect to the dollar.

• A) depreciated
• B) consolidated
• C) appreciated
• D) remained fixed

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Definitions:

Pareto Optimal

A state of allocation of resources from which it is impossible to reallocate to make any one individual or preference criterion better off without making at least one individual or preference criterion worse off.

Pure Exchange Economy

An economic model where agents trade existing goods without the production of new goods, focusing on the allocation and distribution of resources.

Utility Function

A mathematical representation that ranks the preference level of different bundles of goods, showing satisfaction or happiness derived from consumption.

Numeraire

A standard unit of account or measuring stick in economics used to compare the value of various goods or services.