When the value of one currency increases relative to the value of another currency, it has experienced:
A. exchange rate appreciation.
B. interest rate depreciation.
C. net capital inflow.
D. exchange rate depreciation.
Answer: A
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A decrease in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the change in the rate.
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
If the elasticity of demand for a product equals 3 and the supply is perfectly elastic, then if a tax is imposed on this product,
A) the buyer pays all the tax. B) the seller pays all the tax. C) the buyer pays 3/4 of the tax. D) the seller pays 3/4 of the tax. E) the buyer pays 4/3 of the tax.
The only way the standard of living of the average person in a country can increase is if ________ increases faster than ________
A) population; production B) population; income C) population; GDP per capita D) production; population
A depreciation of the exchange rate is most likely to be celebrated by ________
A) exporters B) consumers C) central bankers D) importers