In the figure above, illustrate the effect of an increase in the U.S. interest rate. What is the effect on the foreign exchange rate?
What will be an ideal response?
The figure above shows the effect of the increase in the U.S. interest rate. The demand for dollars increases and the demand curve shifts rightward. The supply of dollars decreases and the supply curve shifts leftward. The equilibrium exchange rate rises, to 100 yen per dollar in the figure.
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The problems of inflation and unemployment are
A. only relevant to European economies. B. not relevant to the U.S. economy. C. major topics of microeconomics. D. major topics of macroeconomics.
Which of the following is an example of a macroeconomic aggregate?
A) Total fixed cost faced by a firm B) Income earned by a household C) Profit earned by an entrepreneur D) The annual inflation rate
A change in the price of one good results in a rotation of the budget line around the point at which the consumer is currently consuming, so that it is steeper or flatter.
Answer the following statement true (T) or false (F)
Loss aversion can explain why very little ________ actually takes place in the securities market
A) short selling B) bargaining C) bartering D) negotiating