A decrease in the real exchange rate will tend to ________ exports and to ________ imports.
A. decrease; decrease
B. increase; decrease
C. decrease; increase
D. increase; increase
Answer: B
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If a consumer receives 20 units of utility from consuming two candy bars, and 25 units of utility from consuming three candy bars, the marginal utility of the second candy bar is
A) 25 utility units. B) 20 utility units. C) 5 utility units. D) unknown as more information is needed to determine the answer.
Provide a concise statement about the relationship between a developing country's emphasis on the export of traditional commodities and:
(a) export earnings stability; (b) comparative advantage; (c) terms of trade.
Macroeconomists are interested in how consumers respond to changes in the market real interest rate because
A) interest rates are an important channel for the effects of monetary and fiscal policies. B) substitution effects and income effects net out in the aggregate. C) of the permanent income hypothesis. D) future income affects current consumption.
If a bank holds $2000 in demand deposits and the required reserve ratio is 0.15, how much can the bank lend out?
a. $2,000 b. $1,700 c. $300 d. $150 e. $2,300