An increase in demand for a nation's currency in the foreign exchange market will:
A. cause the nation's currency to appreciate.
B. make it more expensive for the nation to import goods.
C. cause the nation's balance on current account to shift toward a surplus.
D. make it less expensive for foreigners to buy the nation's goods.
Answer: A
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A decrease in money supply causes the real interest rate to ________ and the price level to ________ in general equilibrium
A) rise; rise B) remain unchanged; fall C) remain unchanged; rise D) fall; fall
In a competitive equilibrium all these relationships hold but one. Which one?
A) Nd=Ns B) Y=G+C C) G=T D) w=z
Figure 9.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers believe that 50% of used bikes in the market are lemons (low quality), what fraction of used bikes sold will actually be plums (high quality)?
A. 8/30 B. 22/30 C. 8/22 D. 30/30
In the base year the price index
A. will always equal 100. B. will equal the year. C. equals 100 times the cost of the market basket in the base year. D. will be between 1 and 100.