In the foreign exchange market, how does a change in the expected future U.S. exchange rate affect the demand for dollars?
What will be an ideal response?
Changes in the expected future exchange rate change the demand for dollars. If the expected future exchange rate falls, the demand for dollars decreases and the demand curve shifts leftward because the expected profit from holding dollars decreases. If the expected future exchange rate rises, the demand for dollars increases and the demand curve shifts rightward because the expected profit from holding dollars increases.
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Why do nations engage in international trade?
What will be an ideal response?
When production in an economy grows more quickly than the population in that economy, which of the following must be occurring?
A) Incomes are growing at a slower rate than the population. B) Real GDP per capita is rising. C) Living standards are falling. D) Real GDP is falling.
The type of good with the smallest trade deficit in the U.S. based on data from 2016 is:
A. foods, feeds, and beverages. B. capital goods. C. industrial goods. D. automotive goods.
Which of the following is the best example of an investment in human capital?
a. an increase in the number of hours worked per week by worker in a job employing low-skilled labor b. the purchase of company stock by a worker c. a summer internship at a law firm filled by someone attending law school d. payments into a retirement pension plan by a skilled laborer