Answer the following questions true (T) or false (F)
1. Dumping refers to countries exporting unwanted and inferior products to other countries.
2. Holding all else constant, a rise in interest rates in the United States will cause the dollar to appreciate in international exchange markets.
3. Holding all else constant, an economic expansion in Mexico should decrease the demand for U.S. dollars.
1. FALSE
2. TRUE
3. FALSE
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Money market mutual funds sell shares to investors and use the money to buy
A) overseas assets through foreign direct investment. B) short-term securities. C) foreign currency. D) mortgage-backed securities.
Which of the following statements would be true of an economy that can be characterized as being to the left of the IS curve?
A) There is an excess demand for commodities at the existing interest rate. B) There will be a tendency for the level of output to decrease. C) There is an excess supply of commodities at the existing interest rate. D) There will be a tendency for interest rates to fall.
The total amount of surplus lost due to taxation is:
A. greater than the amount of revenue generated. B. less than the amount of revenue generated. C. transferred to the government in the form of tax revenues. D. used to fund public services.
Suppose the Consumer Price Index (CPI) increased by 5 percent over each of the last 5 years while the GDP price index increased by 12 percent annually. Which of the following reasons could explain this difference?
a. Police unions across the country agreed to substantial salary cuts. b. Import good prices increased relative to domestic good prices. c. The price of used automobiles increased substantially relative to the prices of other goods. d. The price of fighter planes dropped due to increased competition in the aerospace industry. e. The price of investment goods purchased by businesses increased substantially relative to the prices of all other goods.