The Demand for a Factor of Production Is a Derived

question 99

Multiple Choice

The demand for a factor of production is a derived demand.Derived demand means that:

• A)a firm's demand for a factor of production is derived from its supply decision
• B)the firm's demand can be mathematically derived
• C)both the demand for and supply of factors of production is derived from an external market
• D)the demand curve for a good is derived from the factors of production used to produce that good

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Definitions:

Exports

Goods or services sent from one country to another for the purpose of trade.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach, suggesting that exchange rates should adjust to equalize the price of identical goods in different countries.

Price Level

An overall average price for varied goods and services produced within the economic system.

Dollar Appreciate

The increase in value of the US dollar relative to other currencies in the foreign exchange market.