Suppose we were analyzing the Turkish lira per euro foreign exchange market. If The Euro-Area's interest rate falls relative to Turkey and nothing else changes, then the:
a. The supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market falls, causing an uncertain change in the value of the euro.
b. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing an appreciation of the euro.
c. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market rises, causing an uncertain change in the value of the euro.
d. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing a depreciation of the euro.
e. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.
.D
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Under U.S. commercial policy, the escape clause results in
A) temporary quotas granted to firms injured by import competition. B) tariffs that offset export subsidies granted to foreign producers. C) a refusal of the U.S. to extradite anyone who escaped political oppression. D) tax advantages extended to minority-owned exporting firms. E) tariff advantages extended to certain Caribbean countries in the U.S. market.
If your disposable personal income increases from $40,000 to $48,000 and your consumption increases from $35,000 to $39,000 . your marginal propensity to consume (MPC) is:
a. 0.20. b. 0.40. c. 0.50. d. 0.80. e. 1.00.
A reduction in the marginal tax-rate includes a substitution effect that tends to increase saving
a. True b. False Indicate whether the statement is true or false
Protection of a new industry until it becomes strong enough to compete is called
A. the national defense argument. B. the infant-industry argument. C. the leveling-the-playing-field argument. D. the government indirect tax argument.