Under a flexible exchange rate system, which of the following will be most likely to cause a depreciation in the exchange rate value of the dollar (relative to the English pound)?
a. An economic boom occurs in England, inducing English consumers to buy more American-made automobiles, trucks, and computer products.
b. Real interest rates in the United States fall lower than real interest rates in England.
c. Restrictive monetary policy in the United States causes inflation to be lower than in England.
d. Attractive investment opportunities in the United States induce English investors to buy stock in U.S. firms.
B
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Suppose that Canada can produce 15 timber or 3 film and Mexico can produce 9 timber or 3 film. Suppose that opportunity costs are constant. Which of the following is FALSE?
A) Canada has an absolute advantage in timber production. B) Mexico has a comparative advantage in film production. C) The opportunity costs for producing timber are lower in Canada than in Mexico. D) Canada and Mexico would find trade mutually advantageous at a ratio of one unit of film to six units of timber.
Increases in the overall price level:
A. result in an increase people's dollar-denominated wealth. B. mean that a given number of dollars can buy as much in terms of real goods and services as before. C. tends to cause people to increase their consumption. D. reduce people's real wealth.
The recognition lag refers to the: a. time taken for changes in the money supply to be translated into changes in realGDP
b. time taken by policymakers to formulate an appropriate policy to solve aneconomic problem. c. time taken by policies to have an impact on the different macroeconomic variables. d. time taken by policymakers to recognize that an economic problem exists. e. natural difference between monetary policy timing and fiscal policy timing.
Suppose the domestic supply (QS) and demand (QD) for skateboards in the United States is represented by the following set of equations:QS = -60 + 3PQD = 390 - 2PIn the absence of international trade in skateboards how many skateboards will be sold in the United States?
A. 210 B. 930 C. 138 D. 258