Refer to Figure 18-1. Currency speculators believe that the value of the euro will increase relative to the dollar. Assuming all else remains constant, how would this be represented?
A) Supply would increase, demand would decrease and the economy moves from C to B to A.
B) Supply would decrease, demand would decrease and the economy moves from B to C to D.
C) Supply would decrease, demand would increase and the economy moves from A to D to C.
D) Supply would increase, demand would increase and the economy moves from D to A to B.
A
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What is the law of diminishing marginal product? What causes it?
The capital account balance equals
A. Foreign purchases of U.S. assets plus U.S. purchases of foreign assets. B. The balance of payments plus the sum of the merchandise balance, the services balance, and unilateral transfers. C. The current account balance minus imports. D. The negative of the current account balance.
Velocity is the rate at which money changes hands.
Answer the following statement true (T) or false (F)
The equation M× V = P× Y is called the
A. multiplier formula. B. transactions formula. C. equation of exchange. D. balanced exchange formula.