The High Foreign Exchange Value of the U

question 113

Multiple Choice

The high foreign exchange value of the U.S.dollar in the early 1980s can best be explained by:

• A) Additional investment funds made available from overseas
• B) Lack of investor confidence in U.S.fiscal policy
• C) Market expectations of rising inflation in the United States
• D) American tourists overseas finding costs increasing

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Definitions:

Full Employment

A situation where all available labor resources are being used in the most economically efficient way.

Ppf (Production Possibility Frontier)

A curve depicting the maximum possible output of two goods or services that can be produced with a fixed set of resources and technology, assuming all resources are fully employed.

Consumer Goods

Products and services that are purchased by individuals for personal use or consumption rather than for resale or manufacturing.

Capital Goods

Long-term assets used by businesses to produce goods and services, such as machinery, buildings, and equipment.