Refer to the Diagram Below Where D and S Are

question 78

Multiple Choice

Refer to the diagram below where D and S are Canada's demand for and supply of Swiss francs.At the equilibrium exchange rate,E,Canada's balance of payments is in equilibrium.A shift of the demand curve to D' might be the result of:

• A) a relative decline in interest rates in Switzerland.
• B) a reduction in Canada's relative price level.
• C) a recession in Canada,which slows its rate of growth.
• D) a relative decline in interest rates in Canada.

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Definitions:

Perfect Competitor

A theoretical market structure in which many firms sell identical products, entry and exit are free, and no single buyer or seller can influence the market price.

Economic Profit

The difference between a firm's total revenue and its total costs, including both explicit and opportunity costs.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the number of units produced, indicating the cost per unit.

Perfectly Competitive Industry

A theoretical market structure characterized by unlimited buyers and sellers, homogeneity of products, and no barriers to entry or exit, leading to optimal pricing and efficiency.