An Increase in the Foreign Price of the U

question 24

Multiple Choice

An increase in the foreign price of the U.S.dollar is called:

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

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Definitions:

Law of Diminishing Returns

A principle stating that as more units of a variable input are added to a fixed input, the additional output produced by each new unit will eventually decrease.

Plant Size

The scale or capacity of a factory or production facility, which can affect production efficiency, costs, and the ability to meet demand.

Short Run

A period in economics during which the quantities of at least one input, such as plant size, cannot be changed.

Variable

An element, feature, or factor that is liable to vary or change.