Refer to Scenario 7.8 below to answer the question(s) that follow. SCENARIO 7.8: A swimming pool cleaning company has the following production possibilities. With one, two, three, and four workers, the company can clean 5, 12, 17, and 20 pools per day, respectively. Refer to Scenario 7.8. The average product of labor with four workers is

Currency traders expect the value of the dollar to rise. What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

A) Demand for dollars will decrease, and supply of dollars will increase. B) Demand for dollars will decrease, and supply of dollars will decrease. C) Demand for dollars will increase, and supply of dollars will increase. D) Demand for dollars will increase, and supply of dollars will decrease.

When a country's real exchange rate depreciates,

A) its nominal exchange rate must have appreciated. B) its nominal exchange rate must also have depreciated. C) it can trade its goods for fewer units of foreign goods. D) it can trade its goods for more units of foreign goods.