In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the demand for dollars?
What will be an ideal response?
Changes in the expected future exchange rate change the demand for dollars. If the expected future exchange rate falls, the demand for dollars decreases and the demand curve shifts leftward because the expected profit from holding dollars decreases. If the expected future exchange rate rises, the demand for dollars increases and the demand curve shifts rightward because the expected profit from holding dollars increases.
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The formula for the tax multiplier is
A) (1 + b) / (1 - b). B) 1 / (1 - b). C) -b / (1 - b). D) b / (1 - b).
Aggregate demand ________ if the expected inflation rate increases because ________
A) increases; people expect to receive cost of living raises as the inflation begins B) does not change; inflation does not affect the aggregate demand curve C) increases; people want to make purchases now before the price of goods and services begin to increase D) decreases; people wait for the exchange rates to change before making purchases E) decreases; people want to wait for the price of goods and services begin to decrease
Without an increase in the supplies of factors of production, how can a nation achieve economic growth?
A) by producing more high-value goods and fewer low-value goods B) by increasing the prices of factors of production C) through technological advancement which enables more output with the same quantity of resources D) by lowering the prices of factors of production
A certain magazine offers its subscribers the opportunity to "Buy Now and Save." If at the time their subscription renewal is due they agree to pay for 2 years rather than 1, the renewal price will be $50 per year rather than the usual $60 per y
At what interest rate will the consumer, who is certain she will subscribe to the magazine for the next 2 years, decide to "Buy Now and Save"? A) any interest rate under 50 percent B) any interest rate over 1.5 percent C) any interest rate over 150 percent D) any interest rate under 5 percent E) She will always take this offer if she is absolutely certain to buy the magazine for another 2 years.