A fall in the U.S. price level will cause foreigners to:
A. substitute their own domestically-produced goods for U.S. goods.
B. substitute U.S. goods for their own domestically-produced goods.
C. buy more of their own domestically-produced goods.
D. buy fewer U.S. goods.
Answer: B
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For countries such as the United States and the United Kingdom, it is important to have trade surpluses in order to service their external debts
Indicate whether the statement is true or false
YearSalaryCPI1969$20,52036.71979$43,26572.61989$85,529124.01999$135,250166.62009$170,844214.5If the 1989 salary in 2009 dollars is $147,951, how do we interpret this?
A. Someone earning $85,529 in 1989 would be as well off if he were earning $147,951 in 2009. B. The salary earned in 1989 could have purchased the same amount of goods as $147,951 could buy in 2009. C. It would take $147,951 in 2009 to buy the same amount of goods that was purchased in 1989 with $85,529. D. All of these interpretations are correct.
Refer to the below graph. If the Lorenz curve shifted from (d) to (b), then the Gini ratio and the degree of income inequality would:
A. Increase
B. Decrease
C. Remain constant
D. Become negative
Floating exchange rates
A. float according to the laws of supply and demand. B. are fixed by speculators in foreign exchange markets. C. are rarely used in foreign exchange transactions. D. All of the choices are true characteristics.