Under the Bretton Woods Accord, If a Country Other Than

question 56

Multiple Choice

Under the Bretton Woods Accord, if a country other than the U.S. ran a trade deficit or experienced a capital outflow, there was

• A)upward pressure on the exchange rate and the foreign central bank had to purchase its own currency with dollars.
• B)upward pressure on the exchange rate and the foreign central bank had to purchase dollars with its own currency.
• C)downward pressure on the exchange rate and the foreign central bank had to purchase dollars with its own currency.
• D)downward pressure on the exchange rate and the foreign central bank had to purchase its own currency with dollars.

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Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, reflecting the true financial gain of a business.

Price Discrimination

A pricing strategy where a seller charges different prices for the same product or service to different customers, not based on differences in costs.

Marginal Cost

The additional expense incurred from producing another unit of a product.

Marginal Revenue

The additional revenue that a company generates from selling one more unit of a good or service.