Exhibit 15.1

At the Plaza Accord of 1985, the Group-of-Five nations agreed to drive the value of the dollar downward (i.e., depreciation) so as to help reduce the U.S. trade deficit. Answer the following question(s) on the basis of this information.
-In Figure 2.3, the marginal rate of transformation of wheat into autos is
A) one and two-thirds.
B) two and one-third.
C) three fifths.
D) three sevenths.

Question

Exhibit 15.1

At the Plaza Accord of 1985, the Group-of-Five nations agreed to drive the value of the dollar downward (i.e., depreciation) so as to help reduce the U.S. trade deficit. Answer the following question(s) on the basis of this information.
-In Figure 2.3, the marginal rate of transformation of wheat into autos is
A) one and two-thirds.
B) two and one-third.
C) three fifths.
D) three sevenths.

Quizplus · Accepted Answer

The Plaza Accord aimed to depreciate the dollar, which would make U.S. exports cheaper and imports more expensive, potentially reducing the trade deficit. The marginal rate of transformation (MRT) is not directly related to the Plaza Accord but is a concept in economics that measures the opportunity cost of producing one good over another. The correct MRT value is given as one and two-thirds in the context of the question.

Exhibit 15.1 At the Plaza Accord of 1985, the Group-Of-Five Nations Agreed