Refer to the graph above. Assume that D1 and S1 are the initial demand for and supply of dollars. Suppose that Britain's demand for dollars increases from D1 to D2. If the British government wishes to fix the exchange rate at the initial level, then it would be faced with a problem of:
The graph below shows the supply and demand curves for dollars in the pound/dollar market.
A. Deteriorating terms of trade
B. Rationing LM dollars among British importers who would like to acquire LN dollars
C. A rise in the pound price of dollars
D. Rationing LN dollars among British importers who would like to acquire LM dollars
B. Rationing LM dollars among British importers who would like to acquire LN dollars
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If an activity is worth pursuing at all, then it should be pursued up to the point where
a. total cost equals total benefit. b. average cost equals average benefit. c. marginal cost equals marginal benefit. d. sunk costs equal zero.
A business cycle has two turning points, which are the
A) recession and trough. B) peak and recession. C) trough and peak. D) expansion and recession. E) peak and expansion.
Ceteris paribus, the greater the foreign holdings of the U.S. treasury securities:
a. the lower the value of the U.S. dollar in the foreign exchange market. b. the higher the interest rate in the U.S. c. the greater the level of U.S. imports. d. the lower the wealth of the U.S. citizens. e. the lower the tax rate in the U.S. economy.
Say's Law
a. cannot be satisfied if there is excess supply or demand in individual markets in the long run b. ensures that every firm will sell all of its output c. can be satisfied even if there is a general overproduction or underproduction of goods in the economy d. is satisfied only if every market clears in the short run e. shows that the total value of spending in the economy will equal the total value of the output produced