In the monetary small open-economy model with a flexible exchange rate, an increase in the exchange rate has which impact on domestic money demand?
A) It increases it.
B) It decreases it.
C) It has no impact.
D) It depends.
A
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Why do price ceilings tend to cause persistent imbalances in the market?
a. Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. b. Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. c. Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. d. Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.
Is the national debt a burden to future generations?
a. No, as long as foreigners own a significant share of the national debt. b. No, as long as the national debt is owned purely by U.S. citizens. c. Yes, debt is always a burden to future generations. d. Yes, unless foreigners increase their share of the national debt.
Consider an intersection on a country road. Cars could negotiate with each other by waving to each other to pass or we could have stop signs or we could have yield signs. Which of these makes the most sense on a country road and what difference would it make if the intersection was in the city?
What will be an ideal response?
Successful tacit collusion is most likely to arise among oligopolistic firms when they:
a. are all the same size. b. all have the same production costs. c. do not have a means of engaging in nonprice competition. d. each play the tit for tat strategy.