Refer to the graph below. If currency traders think the European economy will experience a recession and the U.S. economy will not, then this event will most likely cause the:
Assume that U.S. and European governments adopt a system of flexible exchange rates, and the figure below shows the market for euros.
A. Euro to appreciate
B. Euro to depreciate
C. U.S. dollar to depreciate
D. The supply of euros to decrease
B. Euro to depreciate
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An increase in the price a firm receives for its output will lead the firm to:
A. leave output unchanged and earn greater profits. B. reduce output. C. expand output. D. leave output unchanged and earn smaller losses.
If a $10 increase in government expenditure produces a change of $17 in gross domestic product, the value of the government expenditure multiplier is ________
A) 27 B) 1.7 C) 7 D) 170
Sarah has the utility function U(X,Y) = X.5Y.25. When Sarah consumes X = 2 and Y = 6 she has a marginal rate of substitution of
A) -12. B) -1/6. C) -6. D) -1/12.
Holding demand constant, a reduction in supply leads to
A) lower prices and higher quantity demanded. B) lower prices and lower quantity demanded. C) higher prices and higher quantity demanded. D) higher prices and lower quantity demanded.