An Increase in Inflation in the United States Relative to the Rate

question 83

Multiple Choice

An increase in inflation in the United States relative to the rate in France would make:

• A) U.S. goods relatively less expensive in the United States and in France.
• B) French goods relatively less expensive in the United States and U.S. goods relatively more expensive in France.
• C) French goods relatively more expensive in the United States and in France.
• D) French goods relatively more expensive in the United States and U.S. goods relatively less expensive in France.

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Definitions:

Equilibrium Point

In economics, it refers to the state where market supply equals demand, resulting in a stable price and quantity.

S And D Curves

Supply and Demand curves; graphical representations of the relationship between the quantities of goods and services that producers are willing to sell and consumers are willing to buy at various prices.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, due to higher market prices.

Equilibrium Point

The point at which market supply and demand balance each other, and as a result, prices become stable.