Suppose, for whatever reason, the trade deficit of the United States with Europe is projected to fall and that before this happens the exchange rate between the euro and the dollar is .75 euros/dollar. The resulting exchange rate would likely
A. fall to (perhaps) .6 euros/dollar.
B. rise to (perhaps) .9 euros/dollar.
C. cause the exchange rate to have to be expressed in dollars per euro (because the other way would no longer make sense).
D. remain unchanged.
Answer: B
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Which of the following describes actual trends in the U.S. labor force participation rate?
A) The labor force participation rate of adult men has risen since 1950. B) The labor force participation rate of adult women has fallen since 1950. C) The labor force participation rate of adult men not in school, but too young to retire has risen since 1950. D) The labor force participation rate of adult women has risen since 1950. E) The labor force participation rate of all adults has fallen since 1950.
Which of the following is NOT included in the M2 definition of money?
A) currency held by banks B) money market mutual fund balances C) savings deposits D) checkable deposits
Which of the following would lead to a decrease in the money supply?
a. Banks decide to use excess reserves to purchase corporate bonds. b. The Fed decreases the discount rate. c. The Fed decreases the required reserve ratio. d. The Fed sells government bonds. e. The Fed purchases government bonds.
How do fears of future economic problems affect GDP?
(A) Government will spend less and save money for a future economic contraction; GDP will be reduced. (B) Consumers will spend more money in the short term to prevent future economic problems; GDP will be pushed up. (C) Businesses will invest more money in the short term to ensure higher profits in the future; GDP will be pushed up. (D) Consumers will spend less and save money in case future economic problems affect them; GDP will be reduced.