In the Open-Economy Macroeconomic Model,if There Is a Surplus in the Market

question 46

Multiple Choice

In the open-economy macroeconomic model,if there is a surplus in the market for foreign-currency exchange,which of the following will move the market to equilibrium?

• A)the real exchange rate depreciates and net exports fall.
• B)the real exchange rate depreciates and net exports rise.
• C)the real exchange rate appreciates and net exports fall.
• D)the real exchange rate appreciates and net exports rise.

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Definitions:

Break-Even Point

The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.

Net Loss

A financial situation that occurs when a company's total expenses exceed its revenues, indicating a negative profit.

Variable Costs

Costs that change in proportion to the level of activity or volume, such as raw materials and direct labor.

Selling Price

The amount of money a buyer pays to purchase a product or service, determined by factors such as cost, market demand, and competitiveness.