Suppose the exchange rate is initially set at 120 yen per dollar and increases to 140 yen per dollar. In the U.S. economy this would be expected to
A. increase the U.S. trade deficit (or decrease the trade surplus).
B. decrease the U.S. trade deficit (or increase the trade surplus).
C. increase the U.S. trade deficit only if exports change by more than imports.
D. leave the U.S. trade deficit unchanged.
A. increase the U.S. trade deficit (or decrease the trade surplus).
You might also like to view...
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Which of the following types of relationships between a dependent variable y and an independent variable x is represented by a population regression line that resembles a horizontal line?
a. No linear relationship between the mean value of y and x b. A negative linear relationship between the mean value of y and x c. A positive linear relationship between the mean value of y and x d. A normal relationship between the mean value of y and x
If the substitution effect dominates the income effect, an increase in transfer payments will have a positive effect on both consumption and labor supply.
Answer the following statement true (T) or false (F)
The United States, the United Kingdom, Germany and Japan are all developed countries with highly developed and efficient financial markets. However, in all four countries the main source of business finance is internal funding. Why is this so?
What will be an ideal response?