An economy's ________ during a recession
A) labor supply curve shifts to the right B) labor demand curve shifts to the right
C) labor supply curve shifts to the left D) labor demand curve shifts to the left
D
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Points on the IS curve satisfy ________ market equilibrium
A) money B) goods C) stock D) bond
In the market for loanable funds the price of the funds exchanged is
A) the price of bonds. B) the volume of bonds purchased. C) the volume of bonds sold. D) the interest rate.
The net effect of a stronger dollar on real GDP is
A. dependent on whether the increase in aggregate supply is more or less than the decrease in aggregate demand. B. an increase in real GDP. C. an increase in the price level. D. a decrease in real GDP.
The Swiss franc has a floating exchange rate with the U.S. dollar. Today, the interest rate on one-year Swiss bonds denominated in Swiss francs is 6 percent, and the interest rate on one-year U.S. bonds denominated in U.S. dollars is 6 percent. If uncovered interest parity holds between Swiss francs and U.S. dollars, what is the spot exchange rate that investors are expecting in one year? Now, the U.S. money supply unexpectedly increases by 10 percent. What is likely to be the effect on the spot exchange rate? In your answer assume that the asset market clears faster than the goods market (i.e. prices adjust slowly and interest rates adjust quickly). Also, in your answer address short-run changes in the exchange rate as well as long-run changes.
What will be an ideal response?