Assume That the Vertical Axis of the Graph for the Foreign

question 73

Multiple Choice

Assume that the vertical axis of the graph for the foreign exchange market measures the exchange rate in euros per dollar. As the exchange rate rises

• A) American products become more attractive and more dollars are desired.
• B) the euro can buy more dollars.
• C) American goods become less attractive and fewer dollars are demanded.
• D) the dollar depreciates against the euro.

---

Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, or loan payments.

Short-Run Profit

The profit earned by a firm in the short term, typically considering only variable costs and fixed costs remaining constant.

Market Price

The existing rate at which a commodity or service is offered for buying or selling in a marketplace.

Soybeans

A type of legume native to East Asia, widely grown for its edible bean which has numerous uses.