In the above figure, suppose the economy is initially at point A. People come to expect the future U.S. exchange rate to be lower. As a result, there is a change from point A to a point such as ________
A) point B
B) point C
C) point D
D) point E
D
You might also like to view...
In what way is a stronger yen/weaker dollar a burden for Japanese exporters?
A) They received dollars when they sell goods but most of their costs of production are in yen. B) They receive yen when they sell goods but most of their costs of production are in dollars. C) The price of their exports will decline, resulting in lower profits. D) The stronger yen is likely to increase Japanese inflation, resulting in lower profits.
Equities is to ________ as bond is to ________
A) ownership; debt B) fairness; constraint C) stock; asset D) banks; exchanges
The CPI was 120 in 2000 and 132 in 2001. Dorgan borrowed money in 2000 and repaid the loan in 2001. If the nominal interest rate on the loan was 12 percent, then the real interest rate was
a. 2 percent. b. 10 percent. c. 12 percent. d. 22 percent.
If, under a fixed exchange rate system, the dollar price of a Mexican peso is below its equilibrium level, then the
A) dollar is overvalued. B) peso is overvalued. C) dollar has depreciated. D) peso has appreciated.