Which of the following would lead to an increase in the demand for British pounds?
a. A declining interest in British goods
b. A decrease in the U.S. interest rate relative to the British interest rate
c. Expectations that the exchange rate will fall
d. A decrease of the U.S. price level relative to the British price level
e. A decrease in the exchange rate.
B
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The domestic currency price of a representative foreign expenditure basket is
A) P, the domestic price level. B) E, the nominal exchange rate. C) P times E, the domestic price level times the domestic price level. D) P , the foreign price level. E) P times E, the foreign price level times the nominal exchange rate.
In Figure 13-3 above, suppose that the Fed maintains a fixed real money supply and that commodity demand is also fixed. The range of shifts in the LM curve, LM1 to LM2 lead to
A) an unstable equilibrium output, C to B1. B) a stable equilibrium output, C. C) an unstable equilibrium output, B0 to B1. D) a stable equilibrium output, B0 to B1.
Which of the following will most likely cause a shift in the consumption function?
a. a change in consumer confidence b. a change in national output c. a change in real GDP d. a change in disposable income
A business borrows $100,000 for a lease on a factory with an interest rate of 2 percent, the explicit cost is
A. $80,000. B. $2,000. C. $20,000. D. $120,000.