The U.S. dollar exchange rate, e, where e is the nominal exchange rate expressed as Japanese yen per U.S. dollar, will depreciate when:
A. Japanese consumers increase their preference for U.S. cars.
B. the U.S. Federal Reserve eases monetary policy.
C. real GDP in the U.S. decreases.
D. the Bank of Japan eases monetary policy.
Answer: B
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If the price of a good increases and the total revenue also increases, the good has a(n)
A) elastic demand. B) inelastic demand. C) unit elastic demand. D) perfectly elastic demand.
Ancillary tools available to the Fed besides the big three policy options include
a. the discount rate and moral suasion b. margin requirements and moral suasion c. margin requirements and reserve requirements d. the federal funds rate and the discount rate e. open market operations and bracket creep
Which of the following would be considered an example of monetary policy?
A. A broad government initiative to reduce the country's reliance on agriculture and promote high-technology industries. B. A decision by a developing country to reduce government control of the economy and to become more market-oriented. C. A reduction in income tax rates. D. Provision of additional cash to the banking system.
Normative economic analysis answers what question?
What will be an ideal response?