If Speculators Bid Up the Value of the U

question 39

Multiple Choice

If speculators bid up the value of the U.S.dollar in the market for foreign exchange,then

• A)U.S.goods become more expensive relative to foreign goods so aggregate demand shifts right.
• B)U.S.goods become less expensive relative to foreign goods so aggregate demand shifts right.
• C)U.S.goods become more expensive relative to foreign goods so aggregate demand shifts left.
• D)U.S.goods become less expensive relative to foreign goods so aggregate demand shifts left.

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Definitions:

Mark-Up Percentage

The percentage added to the cost price of goods to cover overhead and profit, determining the selling price.

Material Charge

A fee or cost applied for the materials used in the manufacturing or production of goods.

Material Cost

The cost of raw materials and components used to create a product.

Price Skimming

A pricing strategy where a company charges the highest initial price that customers will pay and then lowers it over time.