One Effect of a Stronger Dollar Is

question 46

Multiple Choice

One effect of a stronger dollar is

• A) an increase in U.S. exports and a reduction in U.S. imports.
• B) a reduction in U.S. exports and an increase in U.S. imports.
• C) an increase in net exports.
• D) an increase in both imports and exports. The effect on net exports is uncertain.

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Definitions:

Marginal Revenue

Marginal revenue is the additional income received from selling one more unit of a good or service, crucial for determining the optimal production level and pricing strategies for businesses.

Perfectly Competitive

A market structure characterized by a large number of buyers and sellers, homogenous products, and easy entry and exit from the market.

Price Takers

Entities that have no power to influence the market price of the product they are selling or buying; they accept the prevailing market price.

Marginal Revenue

The extra revenue generated by the sale of an additional unit of a product or service.