As Relative Prices in Various Industries Change Due to Trade

question 19

Multiple Choice

As relative prices in various industries change due to trade, the marginal product of the mobile resources used in the expanding industry __________, and the marginal product of the mobile resources used in the contracting industry __________.

• A) rises; falls
• B) falls; rises
• C) remains the same; remains the same
• D) changes by exactly the same percentage; changes by exactly the same percentage

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Definitions:

International Currency Markets

Markets where currencies are traded internationally, crucial for determining foreign exchange rates.

Dollar

The currency unit of the United States, used as a standard monetary unit in international trade.

Depreciation Of The Dollar

A decrease in the value of the U.S. dollar relative to other currencies in the global market.

American Imports

American Imports are goods and services bought by residents of the United States from other countries.