When the Dollar Depreciates, the Prices of Imported Inputs

question 10

Multiple Choice

When the dollar depreciates, the prices of imported inputs

• A)fall and aggregate supply shifts outward.
• B)fall and aggregate supply shifts inward.
• C)rise and aggregate supply shifts outward.
• D)rise and aggregate supply shifts inward.

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Definitions:

Marginal Cost

The cost associated with the production of an additional unit of a product or service.

Maximizing Profit

The process of adjusting inputs and outputs to achieve the highest possible return from business activities.

Identical Firms

Companies in a market that offer products or services that are exactly the same in terms of quality, performance, and price.

Average Variable Cost

The variable cost per unit of output, calculated by dividing total variable costs by the total output.