In the Market for Foreign-Currency Exchange in the Open-Economy Macroeconomic

question 55

Multiple Choice

In the market for foreign-currency exchange in the open-economy macroeconomic model,a higher U.S.real exchange rate makes

• A)U.S.goods more expensive relative to foreign goods and reduces the quantity of dollars supplied.
• B)U.S.goods more expensive relative to foreign goods and reduces the quantity of dollars demanded.
• C)foreign goods more expensive relative to U.S.goods and reduces the quantity of dollars supplied.
• D)foreign goods more expensive relative to U.S.goods and reduces the quantity of dollars demanded.

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Definitions:

Methanol

A light, volatile, colorless liquid alcohol, CH₃OH, used as a solvent, antifreeze, fuel, and as a starting material for chemical synthesis.

Single Bonds

Chemical bonds involving the sharing of one pair of valence electrons between two atoms, typically indicative of a stable chemical linkage.

Formaldehyde

A colorless, strong-smelling gas used in making building materials and many household products, known chemically as CH2O.

Lewis Structure

A diagram that represents the distribution of valence electrons around atoms in a molecule, indicating bonds and lone pairs.