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. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.
b. 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.
c. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market rises, causing an uncertain change in the value of the Swiss franc.
d. 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.
e. 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
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Refer to the scenario above. The income per capita of Neoland is ________
A) $1,500 B) $1,200 C) $1,000 D) $7,200
Total surplus or gains created from trade equal
a. Seller surplus b. Buyer surplus c. The summation of seller and buyer surplus d. Profits earned by a firm
If intended investment is $2 billion, and unwanted inventory is $0, then we know that all of the following statements are true except
a. consumption spending is $2 billion b. saving = $2 billion c. actual investment = $2 billion d. the economy is in equilibrium e. national income equals aggregate expenditure
A decrease in taxes on the current generation would have no effect on consumption or nationalsaving if
A. individuals increase their consumption by less than the tax cut. B. consumers are not forward looking concerning their future tax burden. C. consumers bequeath all of the tax cut to the next generation. D. individuals face borrowing constraints.