Which of the following will cause an increase in the demand for the Venezuelan currency, the Venezuelan bolivar?
A) real interest rates in Venezuela fall
B) U.S. residents change preferences in favor of goods produced in the United States
C) real interest rates in the United States increase
D) none of the above
Answer: D
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Country X and Country Y are two neighboring countries which are experiencing recession. The government of Country X reduced its expenditure during the recession while Country Y's government increased the supply of money in the economy
Which of the two policies will help the economy to recover from the recession?
A merger between U.S. Steel and General Motors would be an example of a
A) conspiracy in restraint of trade. B) horizontal merger. C) conglomerate merger. D) vertical merger.
In a country with floating exchange rates and high capital mobility, an increase in government spending will be
A) less effective than with low capital mobility. B) highly effective. C) not effective at all. D) harmful to the growth of real incomes.
Refer to the above table. What is the absolute price elasticity of demand if a price falls from $7 to $6.50?
A) 0.85
B) 1.08
C) 1.17
D) 0.92