Refer to the Information Provided in Figure 20

question 76

Multiple Choice

Refer to the information provided in Figure 20.4 below to answer the questions that follow.
Figure 20.4
-Refer to Figure 20.4.The demand and supply of pounds are S₂ and D₂.Which of the following can change the equilibrium exchange rate ($/pound) to $2.50 and the equilibrium quantity to 400 pounds?

• A)an increase in income in the United States
• B)a sudden dislike of British products in the United States
• C)an increase in the price level in Great Britain
• D)a decrease in the price level in the United States

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Definitions:

Decreasing Opportunity Costs

A situation where the cost of forgoing the next best alternative decreases as more units of a product or service are produced.

Capital Goods

These are physical assets used in the production process to manufacture goods and services, including buildings, machinery, and equipment.

Consumer Goods

Products and services that are consumed or used by individuals, as opposed to those purchased by businesses or industries.

Technological Improvements

Enhancements and innovations in technology that increase productivity, efficiency, or value in processes or products.