An increase in U.S. imports of goods and services from the European Union (EU) countries will result in a(n) ________ euro and a(n) ________ U.S. dollars in the foreign exchange market.
A. decrease in the demand for; decrease in the supply of
B. increase in the demand for; increase in the supply of
C. surplus of; shortage of
D. increase in the supply of; increase in the demand for
Answer: B
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Which of the following statements is true?
A) If a nation can produce more of a good than another nation can, it has a comparative advantage in the production of that good. B) Comparative advantage results from a lower opportunity cost of production. C) Absolute advantage results from having more resources. D) Absolute advantage means that an individual or country can produce more of a particular good than can any other individual or country.
Market failure means that
A) the strike organized by unionized employees fails to achieve its goal. B) too many outdated products are offered for sale in the local supermarket. C) there is overallocation or underallocation of resources to certain economic activity. D) an unexpectedly harsh winter shuts down a factory.