If the Exchange Rate Between the Dollar and Japanese Yen

question 105

Multiple Choice

If the exchange rate between the dollar and Japanese yen is below the equilibrium exchange rate, there will be a ________ of dollars, and the exchange rate will ________.

• A) surplus; fall to the equilibrium level
• B) shortage; change only when the supply curve shifts leftward
• C) shortage; rise to the equilibrium level
• D) surplus; rise to the equilibrium level

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Definitions:

Cocoa

A powder made from roasted and ground cacao seeds, used in the production of chocolate, as well as in beverages and baking.

Consumption

The process by which goods and services are used up by consumers, reflecting economic activity and individuals' preferences.

Income

Financial gains received from work or investments, usually on a consistent basis.

Demand

The quantity of a good or service consumers are willing and able to purchase at a given price level.