In the foreign exchange market, the demand for dollars increases and the demand curve for dollars shifts rightward if the
A) U.S. interest rate differential increases.
B) foreign interest rate rises.
C) exchange rate falls.
D) expected future exchange rate falls.
E) U.S. interest rate falls.
A
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Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will
A) decrease. B) perhaps increase, decrease, or stay the same, but more information is needed to determine which it does. C) stay the same. D) increase. E) definitely either stay the same or decrease.
Who is most likely to be earning economic rent?
A. A landlord B. A postal employee C. Someone who lives in a rental apartment D. A major league baseball player
Cross-price elasticity of demand is calculated as the
A) percentage change in quantity sold divided by percentage change in buyers' incomes. B) percentage change in quantity supplied divided by percentage change in price of a good. C) percentage change in quantity demanded of one good divided by percentage change in price of a different good. D) percentage change in quantity demanded divided by percentage change in price of a good.
Which of the following is a key assumption leading to the Monetarist view that government deficits crowd out private investment?
A) Money demand is sensitive to the interest rate. B) The aggregate supply curve is horizontal. C) Technology is fixed. D) Investment is sensitive to the interest rate.