Question

The demand for U.S. dollars by foreign nations increases as:? ?more Americans travel abroad. ?foreigners increase...

The demand for U.S. dollars by foreign nations increases as:?

?more Americans travel abroad.
?foreigners increase their purchase of American goods.
?Americans increase their purchase of foreign goods.
?Americans increase their investments in foreign stocks or bonds.

?Americans send more gifts abroad.

If interest rates fall in country A, other things constant, which of the following statements is true??

?The demand for country A’s currency will fall and the currency will depreciate.
?The demand for country A's currency will fall and the currency will appreciate.
?The demand for country A's currency will increase and the currency will depreciate.
?The demand for country A's currency will increase and the currency will appreciate.

?There will be a net inflow of foreign investments in country A

Economies of scale in the production of a good imply that:

the long-run average cost of production rises as the scale of operation expands.
the marginal cost of production falls below zero as the scale of operation contracts.
the long-run average cost of production falls as the scale of operation expands.
the long-run average cost of production remains the same as the scale of operation increases.
marginal output decreases as the amount of a factor of production is incrementally increased.
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Answer #1

?foreigners increase their purchase of American goods.

When foreigners are purchasing US goods, they need to pay in USD to the exporters from the US. For that they demand USD are willing to supply their respective currencies. Hence USD will experience a rise in demand

?The demand for country A’s currency will fall and the currency will depreciate.

This is because when interest rate is reduced there are net capital outflows. This reduces the demand for its currency so its value falls and it depreciates

the long-run average cost of production falls as the scale of operation expands.

LRATC is the combination of all mimimum points of SRATC so that it is falling under economies of scale and rising under diseconomies of scale.

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