A country's demand for foreign currency is derived from
A. the government's attempt to revalue domestic currency.
B. international transactions entering the debit side of its balance-of-payments accounts.
C. international transactions entering the credit column of its balance-of-payments accounts.
D. an increase in foreign capital inflows into the domestic country.
Answer: B
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An unanticipated reduction in the level of prices in the goods and services market, which results in a temporary increase in real wage rates, will
a. increase the natural rate of unemployment. b. reduce the natural rate of unemployment. c. result in an actual rate of unemployment that is less than the natural rate of unemployment. d. result in an actual rate of unemployment that is greater than the natural rate of unemployment.
Suppose monetary neutrality holds and velocity is constant. A 4 percent increase in the money supply
a. increases the price level by more than 4 percent. b. increases the price level by 4 percent. c. increases the price level by less than 4 percent. d. increases real GDP by 4 percent.
If there is a shortage of product X:
A. the price of the product will rise. B. the price of the product will decline. C. the supply curve will shift to the left and the demand curve to the right, eliminating the shortage. D. fewer resources will be allocated to the production of this good in the future.
If the supply of a product decreases and the demand for that product simultaneously increases, then equilibrium:
A. price must rise, but equilibrium quantity may rise, fall, or remain unchanged. B. price must rise and equilibrium quantity must fall. C. price and equilibrium quantity must both increase. D. price and equilibrium quantity must both decline.