In the short run, a monopolistically competitive firm chooses ...

[frankwu]

In the short run, a monopolistically competitive firm chooses
 
  A) both its price and its quantity.
  B) its price but not its quantity.
  C) its quantity but not its price.
  D) neither its price nor its quantity.

Question 2

In the foreign exchange market, how does a change in the expected future U.S. exchange rate affect the demand for dollars?
 
  What will be an ideal response?

[Tonny]

Answer to Question 1

A

Answer to Question 2

Changes in the expected future exchange rate change the demand for dollars. If the expected future exchange rate falls, the demand for dollars decreases and the demand curve shifts leftward because the expected profit from holding dollars decreases. If the expected future exchange rate rises, the demand for dollars increases and the demand curve shifts rightward because the expected profit from holding dollars increases.

[frankwu]

YES! Correct, THANKS for helping me on my review

[ASDFGJLO]

Gracias!