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

Option C shows a leftward shift in the demand curve for wheat due to an increase in the value of the dollar in foreign exchange markets. This is because an increase in the value of the dollar makes US wheat more expensive for foreign buyers, thus reducing the quantity demanded. Ceteris paribus, this would lead to a lower equilibrium price and quantity of wheat in the US market.

Select the Letter of the Diagram in Figure 28