The market for exchanging Dollars for Euros is in equilibrium. Nokia (a European company) invents a...
The market for exchanging Dollars for Euros is in equilibrium. Nokia (a European company) invents a new smartphone which, amazingly, everyone around the world (including people in the U.S.) wants to buy. Which of the following will occur?
Group of answer choices
The euro depreciates relative to the dollar.
The dollar appreciates relative to the euro.
The dollar depreciates relative to the euro.
The dollar and the euro both depreciate.
Homework Answers
The dollar depreciates relative to the euro.
Explanation: Since the demand for the Nokia phone would increase, the demand for euro would also increase. As a result, the euro would appreciate relative to dollar i..e the dollar would depreciate relative to euro.
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The market for exchanging Dollars for Euros is in equilibrium.
Nokia (a European company) invents a...
47. Suppose that the United States and European Union are the only trading partners in the...
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If the world price is above the domestic equilibrium price, the
domestic country is likely to ____________________ the good.
(2)
The difference between what an economy sells to and buys from
foreigners is _________________.
(3)
The idea that exchange rates and prices adjust to equalize the
cost of living across international boundaries is called
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(4)
In the graph below, when the world price is $3, how many units
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