An Increase in the World Relative Demand for U

question 44

Multiple Choice

An increase in the world relative demand for U.S. output causes

• A) a short-run real depreciation of the dollar against the euro.
• B) a long-run real appreciation of the dollar against the euro.
• C) a long-run real depreciation of the dollar against the euro.
• D) a short-run real appreciation of the euro against the dollar.
• E) a long-run real appreciation of the euro against the dollar.

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Definitions:

Market Penetration

A strategy aiming to increase market share within an existing market segment by using methods such as pricing adjustments, increased promotion, and product improvements.

Market Development

A growth strategy that involves the introduction of existing products into new markets to increase sales and market share.

Diversification

A strategy that involves entering into new markets or investing in different types of assets to reduce risk and increase potential returns.

Market Development

A growth strategy where a business seeks to sell its existing products into new markets to increase its customer base.