Which of the following statements best describes the relationship between exchange rates and aggregate demand for U.S. output?
A. The exchange rate has no effect on aggregate demand.
B. A high exchange rate for the dollar tends to increase aggregate demand, and a low rate tends to reduce it.
C. Aggregate demand for U.S. output increases as the exchange rate increases.
D. A high exchange rate for the dollar tends to reduce aggregate demand, and a low rate tends to increase it.
Answer: D
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If the elasticity of demand for a good is greater than the government expected: a. Consumers will bear more of the burden of the tax than the government expected. b. Producers will bear more of the burden of the tax than the government expected. c. The tax will raise less revenue than the government expected
d. Both b. and c. are true.
Jamal buys a new jacket for $50 . If his willingness to pay is ____, he receives consumer surplus of $15 on his purchase
a. $15. b. $35. c. $50. d. $65.