A Japanese automobile manufacturer building an auto plant in the United States creates a
a. supply of dollars and demand for yen in the foreign exchange market.
b. demand for dollars and a supply of yen in the foreign exchange market.
c. demand for both dollars and yen in the foreign exchange market.
d. supply of both dollars and yen in the foreign exchange market.
B
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As the Federal Reserve ________ bonds, interest rates rise and the price of bonds ________
A) sells; falls B) buys; rises C) sells; rises D) buys; falls
A movement along the bond demand or supply curve occurs when ________ changes
A) bond price B) income C) wealth D) expected return
There is a strong consensus among economists in favor of free trade. Governments appreciate the reasons for free trade as well but they may sometimes restrict trade because
a. their absolute advantage is greater than their comparative advantage b. their comparative advantage is greater than their absolute advantage c. the trade generates negative gains d. they may want to protect infant industries e. they prefer dumping to trade
According to the modern view of the Phillips curve, expansionary macroeconomic policy that leads to inflation will reduce unemployment
a. only if people underestimate the inflationary side effects of the policy. b. only if people overestimate the inflationary side effects of the policy. c. if people accurately anticipate the inflationary side effects of the policy. d. only if monetary policy provides the macroeconomic stimulus.