If the supply curve of a commodity is upward sloping, and the producing country begins to export more in a pure free trade system, the domestic price of the commodity will
A. fall.
B. rise.
C. exceed the price in foreign countries.
D. be below the price in foreign countries.
Answer: B
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A shift in demand toward the foreign country's goods would ________ the domestic real interest rate and ________ net desired saving (desired saving less desired investment) in the economy
A) lower; increase B) lower; decrease C) raise; increase D) raise; decrease
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP rises, and current international transactions become more positive (or less negative). b. There is not enough information to determine what happens to these two macroeconomic variables. c. Real GDP rises, and current international transactions remain the same. d. Real GDP falls, and current international transactions become more negative (or less positive). e. Real GDP and current international transactions remain the same.
When the price of apples goes up:
A. the demand for apples will decrease, ceteris paribus. B. the demand for apples will increase, ceteris paribus. C. the quantity of apples demanded will decrease, ceteris paribus. D. the quantity of apples demanded will increase, ceteris paribus.
If the number of sellers increases, the
A. demand curve will shift to the right. B. demand curve will shift to the left. C. supply curve will shift to the right. D. supply curve will shift to the left.