A result of an exchange rate depreciation, would occur as the spending patterns change in response to a change in the exchange rate.
a. expenditure switching from domestic to foreign products
b. expenditure switching from foreign to domestic products
c. expenditure switching from rural to urban producers
d. terms-of-trade deterioration
Ans: b. expenditure switching from foreign to domestic products
You might also like to view...
In the short run, specific taxes on a firm result in
a. price increases that may not persist in the long run. b. an increase in consumer surplus because the tax permits spending in additional government services. c. shortages of the good being taxed. d. an increase in producer surplus because of the rise in price.
Markets can fail to achieve efficiency when
a. there are prices consumers do not think are fair. b. there are wages workers do not think are fair. c. trade puts people out of work. d. there are public goods.