If Americans demand goods produced in Mexico, it leads to a demand for Mexican pesos and a supply of U.S. dollars on the foreign exchange market
Indicate whether the statement is true or false
True
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Which of the following is not assumed in perfect competition?
a. there are numerous sellers of a product b. all products are identical c. no advertising exists d. all firms are equally efficient in the short run
If a nation experiences severe drought and real risk-free interest rate rises, then:
a. Aggregate demand falls, and aggregate supply rises. b. Aggregate demand and aggregate supply rise. c. Aggregate demand and aggregate supply fall. d. Neither aggregate demand nor aggregate supply change. e. None of the above.
In monopolistically competitive markets, positive economic profits
a. suggest that some existing firms will exit the market. b. suggest that new firms will enter the market. c. are sustained through government-imposed barriers to entry. d. are never possible.
Forward guidance is:
A. statements today about policy targets in the future. B. statements of policy changes and dates those changes will take effect. C. asset purchases that shift the composition of the Fed's balance sheet. D. expansion of the supply of aggregate reserves beyond the amount needed to maintain the policy rate target.