Suppose the United States is experiencing a balance of payments deficit. To prevent the exchange rate from depreciating, the U.S. Treasury must:
A. sell foreign currency and buy dollars.
B. sell dollars and buy foreign currency.
C. sell both dollars and foreign currency.
D. buy both dollars and foreign currency.
Answer: A
You might also like to view...
The opportunity cost of producing one additional truck is
A. the profit that could have been earned from selling that truck. B. the amount of other goods that could not be produced because productive resources were used instead to produce that truck. C. the price of the truck. D. all of the choices are true.
During 2008 and 2009, the debt to GDP ratio in the United States
A) remained relatively unchanged, as it has since the mid 1970s. B) fell to its lowest level since World War I. C) is the highest it has been since the founding of the country. D) rose to its highest level since World War II.
Price discrimination is possible, in part, because
A) costs of production vary as output increases. B) monopolies are regulated. C) monopolies don't profit maximize. D) the willingness to pay can vary among groups of buyers. E) monopolies face horizontal demand curves.
Game theory is applicable to oligopoly behavior because oligopolists
A) use strategic behavior. B) ignore rival firms. C) are price takers. D) can only be profitable if they collude.