In the market for yen, an increase in the relative safety of U.S. investments tends to
A. decrease demand.
B. increase excess demand.
C. increase equilibrium price.
D. cause no change in equilibrium price.
Answer: A
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If Abercrombie & Fitch borrows $8 million from a bank to finance the construction of a new store, this is an example of
A) indirect finance. B) a bond market transaction. C) direct finance. D) a stock market transaction.
If a country had a trade surplus of $50 billion and then its exports rose by $30 billion and its imports rose by $20 billion, its net exports would now be
a. $0 billion. b. $20 billion. c. $40 billion. d. $60 billion.
Suppose a family from Peru eats in a restaurant in Salt Lake City, Utah. How will this transaction be recorded in U.S. international transactions?
A. It is recorded in the current account as a positive (plus) item. B. It is recorded in the current account as a negative (minus) item. C. It is recorded in the capital account as a positive item. D. It is recorded in the current account as a negative item.
Suppose that the price of New York style slices of pizza is $4 each. Matthew is willing to pay $6 for the first slice, James is willing to pay $5 for the second slice, Jessica is willing to pay $4 for the third slice, and Tammy is willing to pay $3 for the fourth slice. Which consumer will not buy pizza slices?
A. Matthew B. James C. Jessica D. Tammy