Use the Following to Answer Questions

question 48

Multiple Choice

Use the following to answer questions :
Figure: Change in the Demand for U.S. Dollars
-(Figure: Change in the Demand for U.S. Dollars) Look at the figure Change in the Demand for U.S. Dollars. The change from D₁ to D₂ will occur, all other things being equal, if the:

• A)supply of euros decreases.
• B)demand for euros increases.
• C)demand for euros decreases.
• D)demand for dollars increases.

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Definitions:

Market Supply Curve

A graphical representation of the relationship between the price of a good or service and the amount of it that suppliers are willing to offer for sale at any given price level.

External Effects

In economics, externalities or external effects occur when the actions of individuals or firms have positive or negative impacts on third parties not directly involved in the transaction.

Demand

Refers to the quantity of a good or service that consumers are willing and able to purchase at different prices at a given time.

Supply

The total amount of a specific good or service that is available to consumers at a given price level and over a specific period.