If the USinflation Rate Falls Relative to the Mexican Inflation Rate,which of Rate,which

question 20

Multiple Choice

If the U.S.inflation rate falls relative to the Mexican inflation rate,which of the following will happen in the market for pesos?

• A) A rightward shift of the demand curve,a leftward shift of the supply curve,and an appreciation of the peso
• B) A leftward shift of the demand curve,a rightward shift of the supply curve,and an appreciation of the peso
• C) A leftward shift of the demand curve,a leftward shift of the supply curve,and a depreciation of the peso
• D) A rightward shift of the demand curve,a rightward shift of the supply curve,and an appreciation of the peso
• E) A leftward shift of the demand curve,a rightward shift of the supply curve,and a depreciation of the peso.

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Definitions:

Relevant Range

The range of activity within which the assumptions about variable and fixed cost behavior are valid.

Cost Behavior

The study of how specific costs change in relation to changes in a company's level of activity or volume of output.

Linear

Pertaining to or resembling a line; often used in mathematics to describe a relationship of direct proportionality.

Relevant Range

The range of activity within which the assumptions made about cost behavior are valid.