Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market, ceteris paribus: The dollar increases in value in the foreign exchange markets.(See Figure 29.4.)
A) a.
B) b.
C) c.
D) d.

Question

Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market, ceteris paribus: The dollar increases in value in the foreign exchange markets.(See Figure 29.4.)
A) a. 
B) b. 
C) c. 
D) d.

Quizplus · Accepted Answer

Event of the increase in dollar value will make US exports more expensive for foreign buyers, decreasing their demand for US wheat. This will lead to a decrease in quantity demanded (shift to the left) and a decrease in equilibrium price, as shown in diagram C.

Select the Letter of the Diagram in Figure 28