This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: An increase in Mexican income decreases aggregate demand in the United States. Is the preceding ... (Read 110 times)

BrownTown3

  • Hero Member
  • *****
  • Posts: 564
on: Jun 29, 2018
An increase in Mexican income decreases aggregate demand in the United States. Is the preceding statement correct or incorrect? Briefly explain your answer.
 
  What will be an ideal response?

Question 2

Why can exchange rates be very volatile?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

fdliggud

  • Sr. Member
  • ****
  • Posts: 366
Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is incorrect. An increase in Mexican income means that Mexican citizens buy more goods and services exported from the United States. The increase in U.S. exports increases U.S. aggregate demand.

Answer to Question 2

Exchange rates can be volatile because in the foreign exchange market the factors that affect the supply also affect the demand and they reinforce each other. For instance, an increase in demand (which raises the exchange rate) often is accompanied by a decrease in the supply (which also raises the exchange rate). As a result, the exchange rate soars higher.


BrownTown3

  • Hero Member
  • *****
  • Posts: 564
Reply #2 on: Jun 29, 2018
Thank you


fdliggud

  • Sr. Member
  • ****
  • Posts: 366
Reply #3 on: Jun 29, 2018
No problemo


« previous next »
 

Did you know?

To combat osteoporosis, changes in lifestyle and diet are recommended. At-risk patients should include 1,200 to 1,500 mg of calcium daily either via dietary means or with supplements.

Did you know?

The Centers for Disease Control and Prevention (CDC) was originally known as the Communicable Disease Center, which was formed to fight malaria. It was originally headquartered in Atlanta, Georgia, since the Southern states faced the worst threat from malaria.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

Did you know?

Certain rare plants containing cyanide include apricot pits and a type of potato called cassava. Fortunately, only chronic or massive ingestion of any of these plants can lead to serious poisoning.

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

A passenger train crosses Stony Creek Bridge in the Rocky Mountains in 1878. Railroads were importan A passenger train crosses Stony Creek Bridge in the Rocky Mountains in 1878. Railroads were importan
Initiation of a new round of replication before completion of the preceding round Initiation of a new round of replication before completion of the preceding round
Effect of an Increase in R&D in the Follower Country on the Steady State Effect of an Increase in R&D in the Follower Country on the Steady State
Agricultural Land as a Fraction of Total Wealth in the United Kingdom Agricultural Land as a Fraction of Total Wealth in the United Kingdom
Age structure for the United States Age structure for the United States
Nutrias native to South America are abundant in freshwater marshes of the Gulf States. Their populat Nutrias native to South America are abundant in freshwater marshes of the Gulf States. Their populat
Video: Endocytosis - pinocytosis, receptor mediated and Transcytosis

For a complete list of videos, visit our video library