Appreciation of the U.S. dollar can be caused by
A. A decrease in the demand for dollars.
B. An increase in the supply of dollars.
C. An increase in the demand for dollars.
D. A decrease in the U.S. interest rate.
Answer: C
You might also like to view...
In order to ________ the long-run real interest rate, the Fed needs to ________
A) raise; raise the long-run inflation expectations B) raise; lower the long-run nominal interest rate C) lower; raise the long-run nominal interest rate D) lower; raise the long-run inflation expectations
Monetary policy will be most effective when
A) the IS curve is flat and the LM curve is flat. B) the IS curve is steep and the LM curve is flat. C) the IS curve is flat and the LM curve is steep. D) the IS curve is steep and the LM curve is steep.
A market basket is made up of three goods, 10X, 12Y, and 18Z. The prices in the base year are $1.20, $2.10, and $3.25, respectively. The prices in the current year are $1.44, $2.23, and $3.88. What is the approximate consumer price index in the current year?
A) 103 B) 111 C) 116 D) 110 E) 96
Economists believe the most persuasive argument for protectionism is to protect infant industries. But the argument has a drawback. What is this drawback?
A) Governments always make the level of protection for infant industries too high. B) Governments are usually too impatient and do not allow protection to remain in place long enough to allow industries to be competitive in international markets. C) Governments usually use tariffs, rather than quotas, to protect infant industries in order to collect tariff revenue. (Quotas do not result in government revenue). D) Protection lessens the need for firms to become productive enough to compete with foreign firms; this often results in infant industries never "growing up."