With the "opening" of trade, the item exported experiences a(n) ________ in demand and therefore a(n) ________ in its relative (domestic) price, whereas the item imported experiences a(n) ________ in demand and therefore a(n) ________ in its relative (domestic) price.
a. increase, increase; decrease, decrease
b. increase, decrease; increase, decrease
c. decrease, decrease; increase, increase
d. decrease, increase; decrease, increase
Answer: a. increase, increase; decrease, decrease
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Measuring the sensitivity of bank profits to changes in interest rates by multiplying the gap for several maturity subintervals times the change in the interest rate is called
A) basic gap analysis. B) the maturity bucket approach to gap analysis. C) the segmented maturity approach to gap analysis. D) the segmented maturity approach to interest-exposure analysis.
The quantity theory of money and prices
A) is derived from the equation of exchange assuming that prices remain constant. B) shows how a change in the price level leads to a change in the money supply. C) shows how the demand for money is inversely related to the price level. D) is the hypothesis that changes in the money supply leads to proportional changes in the price level.
Productive efficiency implies that
A) all consumers' wants are satisfied. B) no advance in technology will occur in the future. C) the attainable region is greater than the unattainable region. D) gains are impossible in one area without losses in another. E) all of the above