If imports = 500 billion euros, exports = 700 billion euros, purchases of domestic assets by foreign residents = 600 billion euros, and purchases of foreign assets by domestic residents = 800 billion euros, what is the quantity of euros demanded in the market for foreign-currency exchange?
a. 1,100 billion euros
b. 600 billion euros
c. 500 billion euros
d. 200 billion euros
d
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The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. Between what two levels of output does the marginal cost of producing Fiery Frijoles first begin to rise?
A) 0 and 1000 B) 1000 and 3000 C) 3000 and 4000 D) 4000 and 4500
During the Financial Crisis of 2007-2009, banks significantly increased their holdings of excess reserves. What impact did this have on the money multiplier? How would the Fed change the monetary base if it wanted to maintain a stable money supply?
What will be an ideal response?
There has been much talk recently about the convergence of inflation rates between many of the OECD economies
You want to see if there is evidence of this closer to home by checking whether or not Canada's inflation rate and the United States' inflation rate are cointegrated. (a) You begin your numerical analysis by testing for a stochastic trend in the variables, using an Augmented Dickey-Fuller test. The t-statistic for the coefficient of interest is as follows: Variable with lag of 1 InfCan ?InfCan InfUS ?InfUS t-statistic -1.93 -6.38 -2.37 -5.63 where InfCan is the Canadian inflation rate, and InfUS is the United States inflation rate. The estimated equation included an intercept. For each case make a decision about the stationarity of the variables based on the critical value of the Augmented Dickey-Fuller test statistic. (b) Your test for cointegration results in a EG–ADF statistic of (–7.34). Can you reject the null hypothesis of a unit root for the residuals from the cointegrating regression? (c) Using a working hypothesis that the two inflation rates are cointegrated, you want to test whether or not the slope coefficient equals one. To do so you estimate the cointegrating equation using the DOLS estimator with HAC standard errors. The coefficient on the U.S. inflation rate has a value of 0.45 with a standard error of 0.13. Can you reject the null hypothesis that the slope equals unity? (d) Even if you could not reject the null hypothesis of a unit slope, would that have been sufficient evidence to establish convergence? What will be an ideal response?
A monopolistically competitive industry is characterized by having no barriers to entry.
Answer the following statement true (T) or false (F)