Which of the Following Statements Is True

question 60

Multiple Choice

Which of the following statements is true?

• A)Conceptually, an FX rate will appreciate in value relative to other currencies when demand is low.
• B)Conceptually, an FX rate will appreciate in value relative to other currencies when supply is high.
• C)Conceptually, an FX rate will depreciate in value relative to other currencies when demand is low.
• D)Conceptually, an FX rate will appreciate in value relative to other currencies when supply is low.

---

Definitions:

Marginal Cost

The cost of producing one additional unit of a good or service, an important concept in economics for determining the optimal level of production.

Average Total Cost

The total cost to produce a given quantity of output divided by the quantity of output produced; it includes all opportunity costs.

Diminishing Marginal Returns

Refers to a point in production where adding an additional factor of production results in a smaller increase in output.

Average Variable Costs

The total variable costs divided by the quantity of output produced, reflecting the average cost of producing each unit.