If a recession in the United Kingdom causes a reduction in British imports and an economic boom in the United States causes an increase in U.S. imports, these events will most likely cause the British pound to ________ and the U.S. dollar to ________.
A. depreciate; depreciate
B. appreciate; depreciate
C. depreciate; appreciate
D. appreciate; appreciate
Answer: B
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Other things equal, in an open economy, monetary policy to offset a contractionary gap will tend to
a. Lower the exchange value of the dollar and lower net exports. b. Lower the exchange value of the dollar and raise net exports. c. Raise the exchange value of the dollar and lower net exports. d. Raise the exchange value of the dollar and raise net exports.
Unlike consumption, which is fairly stable over time, investment is subject to erratic fluctuations
Indicate whether the statement is true or false
The graph above shows the PPC for a country that can produce oil or televisions. The straight line is the trade line and CPC if production is at Point A. Is this country producing the optimal mix of oil and televisions to maximize its income? Carefully explain how you know
What will be an ideal response?
We were on the gold exchange standard from the year ________ to the year _________.
Fill in the blank(s) with the appropriate word(s).