Suppose the current exchange rate between the euro and the United States dollar is 1.15 euros per dollar. If interest rates in the United States increase and interest rates in Europe remain unchanged then
A) the demand for dollars will increase.
B) the demand for dollars will decrease.
C) the demand for euros will increase.
D) None of the above answers is correct.
A
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Which of the following is TRUE?
A) APC - APS = 1 B) MPC + MPS = 1 C) 1 + APC = APS D) APC + MPS = 1
We can experience a shortage of any good or service if
A) the price of using it is too high. B) the price of using it is too low. C) people demand more than they need. D) if people need more than they demand.
An income tax system in which the average tax rate decreases with the level of income is called a
A) progressive income tax system. B) proportional income tax system. C) regressive income tax system. D) flat-rate income tax system.