In an attempt to maintain the peso exchange rate in 1994, the Mexican central bank
A) purchased dollars and sold pesos. B) sold both dollars and pesos.
C) sold dollars and purchased pesos. D) purchased both dollars and pesos.
C
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Consumption goods and services include
A) washing machines and tickets to football games. B) new homes and existing homes (as long as improvements have been made to the existing home). C) tickets to concerts and medical care provided to veterans by the government. D) new and used textbooks as long as they are sold via stores or online. E) vacation time accumulated by workers.
Refer to Figure 4-13 which shows the market for watermelons. Suppose the government imposes a price floor of Pw. How will the price floor affect the quantity supplied, quantity demanded, and quantity exchanged?
What will be an ideal response?