If American demand for purchases of Mexican goods has increased, how would you expect the equilibrium exchange rate in the market for dollars to respond? Support your answer graphically
What will be an ideal response?
If Americans are demanding more Mexican goods, they must trade their dollars in the foreign exchange market for pesos. This increase in the supply of dollars is represented by the shift to the right of the supply curve for dollars below. As the supply of dollars increases, the equilibrium exchange rate falls (the dollar depreciates).
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The graph illustrates the demand for peanuts. Peanuts are a normal good because the
A) demand curve shows that if the price of peanuts rises, there is a movement along the demand curve to a lower quantity demanded. B) demand for peanuts increases when income increases. C) demand for peanuts increases when the price of one of its substitutes rises. D) demand curve for peanuts slopes downward. E) peanuts have both substitutes and complements.
The marginal cost curve crosses the average total cost curve at
a. the efficient scale. b. the minimum point on the average total cost curve. c. a point where the marginal cost curve is rising. d. All of the above are correct.