An increase in the real interest rate on U.S. bonds, everything else equal, will have the following impact on the foreign exchange market:
A. the supply of dollars will increase.
B. the dollar will depreciate relative to foreign currencies.
C. there will be a movement up the existing demand for dollars curve.
D. the demand for dollars will increase.
Answer: D
You might also like to view...
The economic way of thinking asserts, as a universal claim, that
A) politicians are immoral. B) voters are immoral. C) morals don't matter in politics. D) all of the above are true. E) none of the above are true.
In the presence of pollution, social welfare is maximized by
A) reducing output and pollution until marginal benefit of less pollution is equal to the marginal cost of less output. B) reducing output and pollution until the benefit curve (of less pollution) and cost curve (of less output) intersect. C) reducing output and pollution until the benefits of pollution reduction just cover the costs of output reduction. D) None of the above.
According to Friedman and Phelps, the unemployment rate
a. is never below its natural rate. b. is below its natural rate when actual inflation is greater than expected inflation. c. is below its natural rate when actual inflation is less than expected inflation. d. is below its natural rate when actual inflation equals expected inflation.
Which of the following would be categorized as an implicit cost?
a. not being able to spend your $10,000 savings if you sink the money in your business b. the cost of purchasing supplies for your house-cleaning business c. the cost of purchasing auto insurance for your dry-cleaning delivery business A) a only B) a and c only C) b and c only D) all of the above