Currency traders expect the dollar to depreciate. What impact will this have on equilibrium in the foreign exchange market?
A) The dollar will appreciate, and the equilibrium quantity of dollars will increase.
B) The dollar will depreciate, and the equilibrium quantity of dollars exchanged will decrease.
C) The dollar will appreciate, and the equilibrium quantity of dollars will decrease.
D) The dollar will depreciate, and the change in the equilibrium quantity of dollars exchanged cannot be determined.
D
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Futures and options contracts are examples of derivative securities.
Answer the following statement true (T) or false (F)
In the American economy, the central figure is the ________________.
Fill in the blank(s) with the appropriate word(s).
As output rises, the MRP of an imperfect competitor will _____ that of a perfect competitor.
A. rise faster than B. fall faster than C. rise at the same rate as D. fall at the same rate as