In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the supply of dollars?
What will be an ideal response?
Changes in the expected future exchange rate change the supply of dollars. If the expected future exchange rate falls, the supply of dollars increases and the supply curve shifts rightward because the expected profit from holding dollars decreases. If the expected future exchange rate rises, the supply of dollars decreases and the supply curve shifts leftward because the expected profit from holding dollars increases.
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If, in addition to the least squares assumptions made in the previous chapter on the simple regression model, the errors are homoskedastic, then the OLS estimator is
A) identical to the TSLS estimator. B) BLUE. C) inconsistent. D) different from the OLS estimator in the presence of heteroskedasticity.
A Nash equilibrium:
A. is reached when all players choose the best strategy they can, given the choices of all other players. B. is a point in a game when no player has an incentive to change his or her strategy, given what the other players are doing. C. is a stable outcome of a game. D. All of these statements are true.
Which one of the following people would be counted as unemployed in Canada?
A) Ruth is a 14-year-old student and has been looking for an after-school job every day for the past month. B) Ron has quit looking because he believes that there is no work available for him. C) Simone is currently working but expects to be laid off by the end of the month, before next month's survey can be completed. D) Sarah has been looking for a job but is taking a month-long break from the job-seeking effort due to her lack of skills. E) Rebekah is a recent graduate looking for work.
Banks are able to create money only when
a. interest rates are above 2%. b. the Fed sells U.S. government bonds. c. the reserve ratio is 100%. d. only a fraction of deposits are held in reserve.