If American demand for purchases of Mexican goods has increased, how would you expect the equilibrium exchange rate in the market for dollars to respond? Support your answer graphically
What will be an ideal response?
If Americans are demanding more Mexican goods, they must trade their dollars in the foreign exchange market for pesos. This increase in the supply of dollars is represented by the shift to the right of the supply curve for dollars below. As the supply of dollars increases, the equilibrium exchange rate falls (the dollar depreciates).
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A time-series graph measures
A) the value of one variable against the value of another variable. B) the value of an economic variable for different groups in a population at a point in time. C) time on the x-axis and the variable or variables in which we are interested on the y-axis. D) time on both the x-axis and y-axis and the variable or variables in which we are interested in the rest of the figure. E) time on the y-axis and the variable or variables in which we are interested on the x-axis.
Imposing trade barriers does all of the following except
A) lowers incomes. B) invites retaliation from foreign governments. C) lowers domestic prices. D) reduces economic efficiency.