If the U.S. interest rate falls at the same time there is an increase in British real GDP, which of the following would happen in the market for British pounds?
a. A rightward shift of the demand for pounds curve, a rightward shift of the supply of pounds curve, a larger number of pounds traded, and an indeterminate effect on the dollars per pound exchange rate.
b. A rightward shift of the demand for pounds curve, a rightward shift of the supply of pounds curve, a larger number of pounds traded, and an increase in the dollars per pound exchange rate.
c. A rightward shift of the demand for pounds curve, a rightward shift of the supply of pounds curve, a larger number of pounds traded, and a decrease in the dollars per pound exchange rate.
d. A leftward shift of the demand for pounds curve, a rightward shift of the supply of pounds curve, a larger number of pounds traded, and an indeterminate effect on the dollars per pound exchange rate.
e. Cannot be determined without additional information.
A
You might also like to view...
Refer to Figure 16-1. Suppose the economy is in short-run equilibrium above potential GDP and automatic stabilizers move the economy back to long-run equilibrium
Using the static AD-AS model in the figure above, this would be depicted as a movement from A) D to C. B) B to A. C) C to B. D) E to A. E) A to E.
If the annual interest rate is 5 percent,
a. $100 saved today will be worth $105 after one year b. $90 saved today will be worth $100 after one year c. $100 saved today will be worth $5 after one year d. $99 saved today will be worth $100 after one year e. $100 saved today will be worth $1,000 after one year
An upward-sloping supply curve shows that
a. buyers are willing to pay more for a scarce product. b. suppliers are willing to increase production of their goods if they can receive higher prices for them. c. buyers are unaffected by sellers' costs of production. d. the price of a product is not influenced by the price buyers are willing to pay. e. at higher prices, an envy effect begins to affect the demand curve.
Assuming that the substitution effect is large relative to the income effect, tax reform designed to increase saving
a. increases the interest rate and decreases spending on capital goods. b. increases the interest rate and increases spending on capital goods. c. decreases the interest rate and increases spending on capital goods. d. decreases the interest rate and decreases spending on capital goods.