The figure below illustrates the market for British pounds. D£ and S£ are the nonofficial demand and supply curves of the British pounds, respectively.
If the U.S. Federal Reserve uses a contractionary monetary policy to raise U.S. interest rates, the ________ curve would shift right and the pound would tend to
A. S£; appreciate.
B. S£; depreciate.
C. D£ curve and S£; appreciate.
D. D£; depreciate.
Answer: B
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Whenever productive resources are used to make capital goods
A) society is not producing efficiently. B) society is giving up current consumption. C) the production possibilities curve becomes flatter. D) absolute advantage occurs.
James has a comparative advantage in the production of corn, while Harry has a comparative advantage in the production of bread. If James and Harry decide to trade with each other, _____
a. both Harry and James will enjoy gains from trade b. only Harry will enjoy gains from trade c. only Harry will suffer losses from trade d. only James will suffer loses from trade e. neither of them will gain from trade
Fundamental analysis shows that Quadrangle Company is fairly valued. Then Quadrangle Company unexpectedly improves its production techniques and unexpectedly hires a new CEO away from another very successful competitor. Suppose this has no effect on the price of the stock of Quadrangle Company
a. Fundamental analysis would now show the corporation is overvalued. The fact that the price was unchanged is consistent with the efficient markets hypothesis. b. Fundamental analysis would now show the corporation is overvalued. The fact that the price was unchanged is not consistent with the efficient markets hypothesis. c. Fundamental analysis would now show the corporation is undervalued. The fact that the price was unchanged is consistent with the efficient markets hypothesis. d. Fundamental analysis would now show the corporation is undervalued. The fact that the price was unchanged is not consistent with the efficient markets hypothesis.
Which statement shows consumer expectation affecting demand?
a. Mikayla buys a new skirt style that she saw in a fashion magazine. b. Jacob's wages go up, so he buys an extra pair of basketball shoes. c. The price of fuel containing ethanol drops, so gasoline sales decrease. d. Emma buys 10 pounds of coffee because crops are failing in Kenya.