How does an increase in the real exchange rate affect exports and imports?
A) Exports increase; imports decrease.
B) Exports decrease; imports increase.
C) Exports increase; imports change ambiguously.
D) Exports change ambiguously; imports decrease.
E) Exports increase; imports are constant.
C
You might also like to view...
Why is monetary policy more effective in an open economy than in a closed economy?
a. Trade deficits affect exchange rates, which can offset adverse interest rate effects. b. Borrowers can choose to use foreign capital, so that interest rate effects are stronger than expected. c. Interest rate changes affect exchange rates, so that capital flows reinforce the effect of monetary policy. d. Banks can choose to lend to foreigners, so that interest rate effects are essentially nullified.
Why does increased productivity lead to sustained economic growth?
a. Increased productivity means that a population, and thus the labor supply, has increased. b. Increased productivity means a given amount of resources can be used to produce more. c. Greater productivity means a nation has adopted more sustainable practices. d. Once increased, productivity cannot decline, meaning its results are sustainable.
In which of the following models of firm behavior do firms make strategic pricing decisions and also charge a perfectly competitive price?
A. Contestable market model of oligopoly B. Monopoly model C. Perfectly competitive model D. Cartel model of oligopoly
Briefly discuss the relationship between present value and each of the following:a) future valueb) timec) interest rate
What will be an ideal response?