Considering the foreign exchange market, identify four causes for an increase in the supply of dollars.
What will be an ideal response?
The supply of dollars on the foreign exchange market will increase if there is an increased preference for foreign goods. The supply can also increase if the riskiness of foreign assets decreases compared to the U.S. assets, or an increase in wealth in the U.S., or if there is an expected depreciation of the dollar.
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"All monopolies operate with positive economic profits." Do you agree or disagree? Why?
What will be an ideal response?
Suppose you are a U.S. importer purchasing coffee from Guatemala at a dollar price of $10,000 . If the bank charges $0.12 per quetzal, you would have to buy 120,000 quetzals to settle the account with the Guatemalan exporter
a. True b. False Indicate whether the statement is true or false
The natural rate of unemployment
a. is a specific unemployment rate that can be a target for the Fed b. changes as the inflation rate changes c. is natural because it does not change from period to period d. is a measure of the quality of the Fed's performance e. changes as the efficiency of job searches change
If the price elasticity of demand for a good is 0.45, it is most likely that the good
a. has many close substitutes b. is a luxury good c. is high-priced d. is a complementary good e. has a demand curve that is price inelastic