Suppose that prices in France increase by 8 percent while prices in the United States remain relatively stable. We would expect that (on the foreign exchange market) the demand for U.S. dollars will __________ and the supply of U.S. dollars will __________
A) increase; decrease
B) increase; increase
C) decrease; decrease
D) decrease; increase
A
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Capital goods
A) are a special type of consumption goods. B) are consumed because they enhance the enjoyment consumers obtain from other goods and services. C) are goods used to make consumer goods and services. D) lead to inward shifts of a production possibilities curve.
A firm that is the only seller of a good with no close substitutes is a(n)
A) perfect competitor. B) monopolistic competitor. C) oligopolist. D) monopolist.
If the consumer price index (CPI) at the end of year one was 100 and was 108 at the end of year two, the inflation rate during year two was
a. zero; the CPI of 100 indicates that prices were stable. b. 8 percent. c. 5 percent. d. 108 percent.
What is the most likely effect when the price level in the United States decreases relative to the price level in other countries, ceteris paribus?
a. U.S. consumers will buy more foreign goods and services, decreasing the quantity of real GDP demanded. b. Foreign consumers will buy fewer U.S. goods and services, increasing U.S. exports. c. U.S. and foreign consumers will buy more U.S. goods and services, increasing the quantity of real GDP demanded. d. U.S. and foreign consumers will buy fewer U.S. goods and services, increasing U.S. exports.