An Increase in the Real Exchange Rate Will Tend to ________

question 150

Multiple Choice

An increase in the real exchange rate will tend to ________ exports and to ________ imports.

• A)increase; decrease
• B)increase; increase
• C)decrease; decrease
• D)decrease; increase

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Definitions:

Marginal Product

The increase in output that results from a one-unit increase in the input of a particular resource, holding all other inputs constant.

Factor X

A hypothetical or unspecified factor in an equation, model, or situation that has an impact on the outcome but is not explicitly defined.

Production Function

An equation that describes the maximum output that can be obtained from a given set of inputs.

Isoquant

An isoquant line represents combinations of inputs that produce the same level of output in production theory.