If the Exchange Rate Changes from 75 Cents Per Euro

question 37

Multiple Choice

If the exchange rate changes from 75 cents per euro to $1 per euro,the euro has:

• A)appreciated,since its value has increased.
• B)appreciated,since the price of U.S.dollars has increased.
• C)appreciated,making U.S.goods more expensive in European nations.
• D)depreciated,since its value has declined.
• E)depreciated,since its value has increased.

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Definitions:

Total Costs

The total of all costs associated with the creation of goods or services, which encompasses both constant and fluctuating expenses.

Marginal Cost

The change in total cost that results from producing one additional unit of a good or service, a key concept in economic decision-making and pricing strategies.

Average Cost

The total cost divided by the number of goods produced, also known as cost per unit.

Total-Cost Curve

A graph that shows the relationship between the total cost incurred by a firm and the level of output produced.