Which of the Following Compete to Determine Whether the Current

question 42

Multiple Choice

Which of the following compete to determine whether the current account improves or worsens following a rise in the real exchange rate?

• A)appreciation and depreciation
• B)crowding Out effect and producers effect
• C)volume effect and value effect
• D)volume effect and inflation
• E)producers effect and value effect

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Definitions:

Industry's Price

The general price level at which goods and services are bought and sold within a specific industry.

Output

The total amount of goods and services produced by a company, industry, or economy.

Marginal Revenue Curve

A graphical representation that shows how marginal revenue varies with changes in the quantity of output sold.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved or is not achievable.