When the U.S. real interest rate rises ________
A) U.S. dollar assets earn a higher return relative to foreign assets
B) makes U.S. exports cheaper in foreign currencies
C) imports will decrease
D) all of the above
E) none of the above
A
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In a supply-demand diagram, the law of supply is illustrated by
a. shifting the supply curve to the right as suppliers expand production and to the left as they contract production. b. drawing the supply curve so that it slopes upward. c. showing how the equilibrium point changes as the supply curve shifts. d. drawing a vertical line at the quantity that producers choose to supply.
Suppose the measured unemployment rate is 7.5% and the true natural rate of unemployment is 5.1%. If the chair of the Fed believes the natural rate of unemployment to be 6.7%, then the chair will
A) stimulate the economy when it should be slowed. B) slow the economy when it should be stimulated. C) stimulate the economy, exactly as called for. D) slow the economy, exactly as called for.
If aggregate demand increases in the intermediate range of the aggregate supply curve then the:
a. price level rises and real GDP falls. b. price level rises and real GDP rises. c. price level falls and real GDP falls. d. price level falls and real GDP rises.
If both supply and demand decrease and the shift in demand dominates, which of the following happens? a. The equilibrium quantity increases. b. The equilibrium price and the equilibrium quantity decrease. c. The equilibrium price decreases and equilibrium quantity increases. d. The equilibrium quantity increases and the equilibrium price change is indeterminate
e. The equilibrium price increases and the equilibrium quantity decreases.