A(n) ________ in U.S. interest rates will cause an increase in the demand for U.S. dollars and a(n) ________ in the (per dollar) exchange rate.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease
Answer: A
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Every Giffen good is a necessity but not every interior good is a necessity.
Answer the following statement true (T) or false (F)
Efficiency wages paid to workers:
A) equal the lowest pay that workers would accept. B) are wages above the lowest pay that workers would accept. C) equal the marginal revenue product of the workers. D) are wages adjusted for changes in the price level.
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D2 and S1 (point C). Which of the following changes would cause the equilibrium to change to point B?
A) a positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples B) an increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples C) an increase in the number of apple producers and a decrease in the number of apple trees as a result of disease D) a decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples
What would be the likely result of a recessionary gap? If this leads to a fall in the nominal wage what impact it would have on the aggregate supply curve and on recessionary gap?
What will be an ideal response?