What is the impact of expansionary fiscal policy on the exchange rate? Explain the process through which expansionary fiscal policy affects the exchange rate.
What will be an ideal response?
A fiscal expansion normally makes the exchange rate appreciate. It pushes up the interest rates. At higher interest rates, domestic securities become more attractive to foreign investors, who go to the foreign-exchange markets to buy domestic currencies with which to purchase them. This buying pressure drives up the value of the domestic currency.
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Which of the following types of unions did the CIO promote?
A) craft unions B) public sector unions C) industrial unions D) military unions
Which of the following statements is true?
a. World trade as a fraction of world GDP is much less than it was at the end of the 19th century. b. War decreases the pace of globalization. c. Large countries such as the U.S., Russia, and Japan have high scores in economic integration when measured against the criteria of Foreign Policy magazine. d. Poor countries tend to have high scores in the personal contact area when measured against the criteria of Foreign Policy magazine. e. The U.S. increased its international investments after the September 11, 2001 terrorist attacks to revive their economy.
A major difference between a tariff and a quota is that a tariff a. will reduce the ability of foreigners to obtain the purchasing power to buy a nation's export goods, but a quota will not affect the demand of foreigners for the nation's exports. b. typically generates tax revenue while a quota does not
c. can easily be rescinded but a quota cannot. d. will reduce imports but a quota generally will not.
In the late 1960s, Milton Friedman and Edmund Phelps argued that
a. the trade-off between inflation and unemployment did not apply in the long run This claim is consistent with monetary neutrality in the long run. b. the trade-off between inflation and unemployment did not apply in the long run. This claim is inconsistent with monetary neutrality in the long run. c. the trade-off between inflation and unemployment applied in both the short run and the long run. This claim is consistent with monetary neutrality in the long run. d. the trade-off between inflation and unemployment applied in both the short run and the long run. This claim is inconsistent with monetary neutrality in the long run.