How Does an Increase in the Budget Deficit Affect the Demand

question 37

Multiple Choice

How does an increase in the budget deficit affect the demand for dollars and the supply of dollars on the foreign exchange market?

• A)The demand for dollars falls,and the supply of dollars falls.
• B)The demand for dollars rises,and the supply of dollars rises.
• C)The demand for dollars rises,and the supply of dollars falls.
• D)The demand for dollars falls,and the supply of dollars rises.

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Definitions:

Competitive Market

A market structure where many firms offer products or services that are similar, encouraging competition and efficiency.

Input Prices

The cost of resources used in the production of goods or services, including raw materials, labor, and overheads.

Technological Change

Refers to the improvement or innovation in technology, affecting how goods or services are produced or delivered.

Number Of Suppliers

The total count of entities or individuals providing a specific good or service in a market.