You Are Staying in London Over the Summer and You

question 311

Multiple Choice

You are staying in London over the summer and you have a number of dollars with you. If the dollar depreciates relative to the British pound, then other things the same,

• A)the dollar would buy more pounds. The depreciation would discourage you from buying as many British goods and services.
• B)the dollar would buy more pounds. The depreciation would encourage you to buy more British goods and services.
• C)the dollar would buy fewer pounds. The depreciation would discourage you from buying as many British goods and services.
• D)the dollar would buy fewer pounds. The depreciation would encourage you to buy more British goods and services.

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Definitions:

Deadweight Loss

The loss of economic efficiency when the equilibrium outcome is not achievable or not achieved.

Excise Tax

A tax directly levied on certain goods, such as alcohol and tobacco, by a government entity.

Transactions

The process of exchanging goods, services, or financial instruments between parties.

Demand Curve

The demand curve is a graphical representation showing how the quantity demanded of a good or service varies with its price, typically sloping downward from left to right.