What would the Bank of England (England's Central Bank) do to raise the value of the British pound in terms of the euro?
a. It would simply announce its desired exchange rate for the British Pound, and the market forces of supply and demand would do the rest. No further action would be necessary.
b. It has no influence over the pound exchange rate.
c. It would buy British pounds and supply euros in the foreign exchange market.
d. It would buy euros and supply British pounds in the foreign exchange market.
e. It would sell dollars and buy euros.
.C
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The depreciation of the dollar will make U.S. goods ________ to foreigners and make imports ________ for U.S. residents
A) more expensive; cheaper B) cheaper; more expensive C) cheaper; cheaper D) more expensive; more expensive
Give an example of price discrimination
What will be an ideal response?
In a fixed exchange rate system,
A. The capital account surpluses must offset current account deficits. B. A country can eliminate a surplus of its currency by eliminating its protectionist barriers to trade. C. A balance-of-payments deficit can be corrected by expansionary fiscal and expansionary monetary policies. D. Excess demand for a currency is eliminated by using foreign exchange reserves to increase demand.
When the aggregate price level (P) is multiplied by real aggregate income (Y), the result is
A. the real aggregate price level. B. aggregate money demand. C. the aggregate money multiplier. D. nominal income.