When foreign residents increase their demand for U.S. dollars, ceteris paribus,
A. Foreign residents, at the same time, reduce their supply of foreign currency to the foreign exchange market.
B. The dollar price of foreign currency will rise.
C. The dollar will appreciate in value.
D. The dollar will depreciate in value.
Answer: C
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A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Use the diagram above to identify the pre-trade situation for Australia and Sri-Lanka
Where on the K/L axis will you find each of the two countries? Which of the two countries has a higher relative wage, w/r? Which product is the labor intensive, and which is the land intensive one? Show where the relative price of cloth to food will be found once trade opens between these two countries. Show where the relative wages of each will appear.
Labor is the only resource that cannot earn rent
Indicate whether the statement is true or false
Which of the following goods are likely to have a positive cross-price elasticity?
A. Butter and margarine B. Pepsi and pizza C. Peanut butter and jelly D. Tires and automobiles