Suppose we were analyzing the pound per Swiss franc foreign exchange market. If Switzerland's interest rate rises relative to England and nothing else changes, then the:
a. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market rises, causing an appreciation of the Swiss franc.
b. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market falls, causing an uncertain change in the value of the Swiss franc.
c. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing a depreciation of the Swiss franc.
d. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.
e. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing an appreciation of the Swiss franc.
.A
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It is difficult to determine expected real rates of interest because
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When the production possibilities frontier bows outward from the origin
A) some of society's resources are unemployed. B) opportunity costs are constant. C) opportunity costs are increasing. D) opportunity costs are decreasing.
Use the following table to answer the next question.YearReal GDPPopulation2008$20,000200200940,000400201060,000400201170,000500In 2009, real GDP per capita equals ________.
A. $20,000 B. $100 C. $1,000 D. $2,000