Under flexible exchange rate regime, a money-induced
A) decrease in U.S. prices causes an immediate appreciation of the foreign currencies against the dollar.
B) increase in U.S. prices causes an immediate appreciation of the foreign currencies against the dollar.
C) increase in U.S. prices causes an eventual appreciation of the foreign currencies against the dollar.
D) increase in U.S. prices causes an eventual depreciation of the foreign currencies against the dollar.
E) decrease in U.S. prices causes no change in foreign exchange rate.
B
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A person who generally drives without a seat belt on does not reveal this to his automobile insurance company before he purchases insurance. This is an example of
A) adverse selection. B) moral hazard. C) signaling. D) screening.
Nations that borrow from abroad to support current investment will:
A. always be better off in the future. B. always sacrifice future consumption. C. be better off in the future if the investments are profitable. D. sacrifice future consumption only if the investments are profitable.
Advertising can lead to more competition and lower prices for consumers.
Answer the following statement true (T) or false (F)
When two goods are substitutes for each other, the cross price elasticity of demand
A) will be negative. B) will be zero. C) may be either positive or negative. D) will be positive.