Unanticipated expansionary monetary policy will increase economic growth and push inflation upward while lowering real interest rates. This will cause
a. an increase in the demand for foreign currencies and a decline in the foreign exchange value of the dollar.
b. a decrease in the demand for foreign currencies and a decline in the foreign exchange value of the dollar.
c. an increase in the demand for foreign currencies and an increase in the foreign exchange value of the dollar.
d. a decrease in the demand for foreign currencies and an increase in the foreign exchange value of the dollar.
A
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If a buyer in an economic transaction has more information than the seller, the buyer benefits at the expense of the seller. This phenomenon is due to
A) moral hazard. B) economically irrational behavior. C) gains from trade. D) adverse selection.
The terms of trade refers to:
What will be an ideal response?
The non-income determinants of consumption include all of the following EXCEPT
A. stock of assets owned by household. B. real wealth. C. the interest rate. D. changes in business investment spending.
"If the wage rate paid to one form of labor is twice the cost of another form of labor, the first type of labor must be twice as productive." Comment
Indicate whether the statement is true or false