The exchange rate is the
A. Balance-of-trade ratio of one country to another.
B. Opportunity cost at which goods are produced domestically.
C. Amount of currency that can be purchased with one ounce of gold.
D. Price of one country's currency expressed in terms of another country's currency.
Answer: D
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Which of the following statements is true?
a. Cost-push inflation is caused by an increase in resource costs. b. If nominal interest rates remain the same and the inflation rate falls, real interest rates increase. c. All of the answers are correct. d. Demand-pull inflation is caused by excess total spending. e. If real interest rates are negative, lenders incur losses.
All of the following are deficit items in the balance of payments accounts EXCEPT
A) U.S. residents purchases of gold from foreign residents. B) U.S. tourists spending funds in Europe. C) exports of merchandise. D) U.S. purchases of foreign companies' stocks and bonds.
The benefits of net capital inflows to a country include all of the following except:
A. interest and dividend payments owed to foreign investors. B. a potentially higher growth rate. C. a higher rate of investment in new capital. D. a larger pool of total savings.
In the "cost of capital channel" of monetary policy, a lower interest rate __________ spending
A) raises consumption B) raises investment C) lowers consumption D) lowers investment