For a major country with extensive capital flows, what is the effect of a decrease in interest rates?
A. A currency depreciation and increased net exports
B. A currency depreciation and reduced net exports
C. A currency appreciation and increased net exports
D. A currency appreciation and reduced net exports
Answer: A
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Refer to the figure above. If the government of China wants to keep the exchange rate below E yuan per dollar:
A) it will have to buy dollar and sell yuan. B) it will have to buy yuan and sell dollars. C) it will have to buy both dollars and yuan. D) it will have to sell both dollars and yuan.
The quantity theory of money states explicitly that the:
A. value of money is determined by the overall quantity of money in existence. B. Real GDP is determined by the money supply. C. money supply is determined by the price level. D. there is no relationship between the value of money and the quantity of money in existence.
Which of the following best describes Producer Surplus?
(a) The price suppliers are willing to sell a good for. (b) The profits made by a firm. (c) The difference between what a consumer is willing to pay for a good and what they actually pay. (d) The difference between what a producer is willing to sell a good for and what they actually sellthe good for.
Which of the following would NOT allow society to move to point h in the figure above?
A) an improvement in technology B) more efficient use of resources of current resources C) an increase in quantity of labor D) an increase in quantity of capital