Which of the Following Is NOT a Result of a Permanent

question 97

Multiple Choice

Which of the following is NOT a result of a permanent fall in foreign demand on one country's exports under floating exchange rate?

• A) The DD curve shifts to the left due to reduction of aggregate demand.
• B) The AA curve shifts upwards due to the increased expected long-run exchange rate.
• C) a reduction in output by a smaller degree compared to temporary fall in demand
• D) depreciation in home country's currency
• E) a raised level of unemployment

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Definitions:

Break-Even Quantity

The number of units that must be sold for total revenues to equal total costs, resulting in no profit or loss.

Fixed Costs

Business expenses that remain constant regardless of the level of production or sales activities.

Marginal Cost

The additional cost incurred by producing one more unit of a particular good or service.

Sunk Cost

Expenses that have already been incurred and cannot be recovered, which should not influence future business decisions.