Which of the following best explains a government's motive for reducing the value of its currency?
A. Increase the trade balance and prevent the price level from falling further.
B. Decrease the trade balance and prevent the price level from falling further.
C. Increase the trade balance and prevent the price level from rising further.
D. Decrease the trade balance and prevent the price level from rising further.
Answer: A
You might also like to view...
Tom spends all his income on comics and cola and maximizes his total utility. If the price of a comic is $4 and the price of a can of cola is $1, then the ratio of the ________ is 4
A) marginal utility from cola to the marginal utility from comics B) marginal utility from comics to the marginal utility from cola C) number of comics Tom buys to the number of cola Tom buys D) total utility from comics to the total utility from cola
People are willing to pay more for a diamond than for a bottle of water because
a. the marginal cost of producing an extra diamond far exceeds the marginal cost of producing an extra bottle of water. b. the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water. c. producers of diamonds have a much greater ability to manipulate diamond prices than producers of water have to manipulate water prices. d. water prices are held artificially low by governments, since water is necessary for life.