A decrease in the domestic _____ causes domestic goods to become less expensive relative to foreign goods and increases net exports. The increase in net exports causes a(n) _____ in the quantity of domestic aggregate goods and services demanded and is known as the _____ effect
Fill in the blank(s) with correct word
price level, increase, exchange-rate
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In the foreign exchange market, how will each of the following influences affect the demand for dollars and the demand curve for dollars?
a. an increase in the exchange rate b. an increase in the U.S. interest rate c. a fall in the expected future exchange rate
According to the "wealth effect," when the ________ falls, the ________ rises
A) price level; the real value of household wealth B) price level; the nominal value of household wealth C) inflation rate; nominal value of household assets D) unemployment rate; average level of household income
In the Cournot model, if a firm's marginal cost increases, its best-response function will
A) shift inward. B) not change. C) shift outward. D) The shift is ambiguous.
One of the features of the circular flow model is that it shows the: a. interaction between the government and firms in the financial market
b. interaction between employers and employees in the labor market. c. interaction between households and firms in the market for goods and services. d. interaction between large business houses and households in the financial market.