In the Open-Economy Macroeconomic Model,other Things the Same,which of the Following

question 5

Multiple Choice

In the open-economy macroeconomic model,other things the same,which of the following both make the exchange rate fall?

• A)U.S.investment demand falls and foreign demand for U.S.goods falls
• B)U.S.investment demand falls and foreign demand for U.S.goods rises
• C)U.S.investment demand rises and foreign demand for U.S.goods falls
• D)U.S.investment demand rises and foreign demand for U.S.goods rises

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Definitions:

Labor-Intensive

A term describing industries or businesses that require a large amount of human labor relative to capital equipment to produce goods or services.

Comparative Advantage

The ability of a country, firm, or individual to produce a particular good or service at a lower opportunity cost than others, leading to more efficient trade outcomes.

PPCs (Production Possibility Curves)

Graphical representations that show the maximum possible output combinations of two goods that an economy can achieve when all resources are fully and efficiently utilized.

Specialization

The process of concentrating on and becoming expert in a particular subject or skill, often leading to increased efficiency and productivity.