Suppose we were analyzing the pound per Swiss franc foreign exchange market. If Switzerland's risk level rises relative to England and nothing else changes, then
a. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing an appreciation of the Swiss franc.
b. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market rises, causing an appreciation of the Swiss franc.
c. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.
d. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing a depreciation of the Swiss franc.
e. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market falls, causing an uncertain change in the value of the Swiss franc.
.D
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In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will
A) export 50 units. B) import 50 units. C) export 200 units. D) import 150 units.
If real interest rates in the United States are higher than those of our trading partners, what will tend to happen to the foreign exchange value of the dollar and the U.S. current account deficit or surplus?
a. The dollar will depreciate; the current account will move toward a deficit. b. The dollar will depreciate; the current account will move toward a surplus. c. The dollar will appreciate; the current account will move toward a deficit. d. The dollar will appreciate; the current account will move toward a surplus.
The most costly expansion of Medicaid since its inception is referred to as:
a. the 2014 Medicaid expansion. b. SHIP. c. AFDC. d. SCHIP. e. TANF.
The diamond-water paradox arises because:
A. essential goods may be cheap while nonessential goods may be expensive. B. the marginal utility of certain products increases, rather than diminishes. C. essential goods are always higher priced than nonessential goods. D. we sometimes fail to use money as a standard of value.