Consider a Foreign Exchange Market Diagram with Dollars on the Horizontal

question 25

Multiple Choice

Consider a foreign exchange market diagram with dollars on the horizontal axis,the yen price of the dollar on the vertical axis,an upward-sloping supply curve and downward-sloping demand curve.At an exchange rate above the equilibrium rate there is an excess ________ dollars causing market pressure for ________ of the dollar.

• A)demand for,appreciation
• B)demand for,depreciation
• C)supply of,appreciation
• D)supply of,depreciation

---

Definitions:

Monopolistically Competitive

Refers to a market structure where many firms sell similar but not identical products, allowing for some degree of market power and product differentiation.

Advertising

The action or profession of producing advertisements for commercial products or services.

Monopolistically Competitive

A market structure characterized by many sellers offering similar but not identical products, leading to competitive pricing and product differentiation.

Economic Profit

The net financial outcome for a company after all explicit and implicit costs are taken from its overall earnings.