Compared to a Situation in Which There Is No Change

question 147

Multiple Choice

Compared to a situation in which there is no change in the value of the dollar relative to the peso,in which of the following situations would you be worse off?

• A)you borrow 10,000 pesos,you earn income in dollars,the dollar appreciates against the peso,you must pay back the loan in pesos
• B)you borrow $10,000,you earn income in pesos,the dollar depreciates against the peso,you must pay back the loan in dollars
• C)you borrow $10,000,you earn income in pesos,the dollar appreciates against the peso,you must pay back the loan in dollars
• D)you borrow 10,000 pesos,you earn income in pesos,the dollar depreciates against the peso,you must pay back the loan in pesos

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Definitions:

Capital/Labor Ratio

The capital/labor ratio is a measure used in economics to indicate the amount of capital relative to the quantity of labor used in the production process.

Labor Productivity

The measure of the economic output produced per unit of labor input.

U.S.

A country consisting of 50 states, a federal district, and various territories, known formally as the United States of America.

People's Republic Of China

A country in East Asia, the world's most populous nation, governed by the Communist Party of China.