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 112 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?

The first oncogene was discovered in 1970 and was termed SRC (pronounced "SARK").

Did you know?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

Did you know?

Persons who overdose with cardiac glycosides have a better chance of overall survival if they can survive the first 24 hours after the overdose.

Did you know?

There are major differences in the metabolism of morphine and the illegal drug heroin. Morphine mostly produces its CNS effects through m-receptors, and at k- and d-receptors. Heroin has a slight affinity for opiate receptors. Most of its actions are due to metabolism to active metabolites (6-acetylmorphine, morphine, and morphine-6-glucuronide).

Did you know?

Most fungi that pathogenically affect humans live in soil. If a person is not healthy, has an open wound, or is immunocompromised, a fungal infection can be very aggressive.

When the United States gets stuck over a controversial issue—usually something a divided Congress ca When the United States gets stuck over a controversial issue—usually something a divided Congress ca
The Gender Pay Gap Over Time: What Percentage of Men's Income Do Women Earn? The Gender Pay Gap Over Time: What Percentage of Men's Income Do Women Earn?
Examples of low and high Entropy states Examples of low and high Entropy states
The growing demand for electrical power, carbon sequestration and storage must be a priority The growing demand for electrical power, carbon sequestration and storage must be a priority
Relationship Between Income per Capita and Population Growth Relationship Between Income per Capita and Population Growth
Groundwater troubles in the United States Groundwater troubles in the United States
Video: Mitochondrial Structure & ETC Protein Complexes (Protein Complexes and Electron Transport)

For a complete list of videos, visit our video library