When the Nominal Exchange Increases from 40

question 115

Multiple Choice

When the nominal exchange increases from 40.1 rupees per dollar to 40.5 rupees per dollar,the dollar has

• A) appreciated.
• B) depreciated.
• C) become overvalued.
• D) become undervalued.
• E) been devalued.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for competition based on quality, price, and brand.

Oligopoly

An oligopoly is a market structure in which a few firms dominate the industry, leading to limited competition.

Average Total Cost

Total cost divided by the quantity of output

Marginal Cost

Additional costs associated with the production of one more unit of a product or service.