Under a system of flexible exchange rates, an increase in the supply of foreign exchange (an increase in the demand for the dollar) will cause the
a. dollar to appreciate.
b. dollar to depreciate.
c. U.S. trade deficit to decrease.
d. U.S. inflation rate to increase.
A
You might also like to view...
The excess burden of a tax is also a deadweight loss
Indicate whether the statement is true or false
The “investment” component of aggregate demand will include all of the following except
A. expenditures of business firms on new plants. B. expenditures of business firms on new equipment. C. resales of existing physical assets. D. household spending on new homes.
Which of the following actions would the Fed take to fight inflation?
(A) Increase the money supply. (B) Reduce the money supply. (C) Increase government spending. (D) Raise taxes.
A sudden increase in aggregate demand causes a ________ inflation and ________ output.
A. cost-push; lower B. demand-pull; higher C. demand-pull; lower D. cost-push; higher