How can long run values in the real exchange rate change?
What will be an ideal response?
An increase in world relative demand for U.S. output causes a long-run real appreciation of the dollar against the euro (a fall in real dollar/euro exchange rate).
A relative expansion of U.S. output causes a long-run real depreciation of the dollar against the euro (a rise in real dollar/euro exchange rate).
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Private markets tend to undersupply nonexcludable goods because of
a. individuals' incentives to be untruthful. b. overcrowding. c. free riding. d. dissipated rents.
Economics is the social science that studies
A) the real reasons people buy goods and services. B) the psychology of individuals and businesses. C) whether a nation has enough natural resources. D) how people make choices to cope with scarcity. E) how choices made in the social interest could eliminate scarcity.
When a business is set up as a sole proprietorship, the owner of the business faces limited liability
Indicate whether the statement is true or false
If there is no change in the quantity of currency, the purchase of $100 million of Treasury securities by the Federal Reserve will cause reserves at banks to
A) decrease by $100 million. B) increase by $100 million. C) decrease by less than $100 million. D) increase by less than $100 million.