Ceteris paribus, if the dollar appreciated in relation to a foreign currency, would the U.S. sell more goods or fewer goods to consumers in that foreign country? Why?
If the dollar appreciated we would expect U.S. firms to sell fewer goods to those foreign consumers. A higher exchange rate value of the dollar would make it more costly for foreign consumer to purchase U.S. dollars. As a result, those consumers would tend to purchase fewer U.S. goods.
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The figure above shows the supply curve for soda. The market price is $1.00 per soda. The producer surplus from the 10,000th soda is
A) $0.00. B) $0.50. C) $1.00. D) more than $1.00. E) None of the above answers is correct.
Credit rationing refers to
A) the increase in the interest rate that occurs when the demand for credit increases. B) the increase in the interest rate that occurs when the supply of credit increases. C) the increase in the interest rate that occurs when the supply of credit decreases. D) a restriction in the availability of credit.
According to the above figure for a gasoline market, what happens when the price per gallon of gasoline jumps from $1 to $4?
A) A gasoline surplus is replaced by a gas shortage. B) The market moves from a shortage of 40 million gallons/day to a surplus of 50 million gallons/day. C) The market shortage is replaced by market equilibrium. D) A surplus of 40 million gallons/day results.
Which of the following statements about the real loanable funds market is not true?
a. Movements in the real risk-free interest rate cause significant changes in borrowers' willingness and ability to tap the domestic credit market if the demand is highly elastic. b. The more inelastic a nation's supply of real loanable funds, the less sensitive domestic savers, banks, foreigners, and governments are to changes in the real risk-free interest rate. c. Monetary policy is usually stronger in nations with elastic real loanable funds demands. d. Fiscal policy is usually weaker in nations with inelastic loanable funds demands. e. All of the above are true.