If the exchange rate, dollars per euro, is above its equilibrium level, it will heighten the possibility that France will experience a trade deficit
Indicate whether the statement is true or false
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What, according to the textbook, accounts for the federal budget surplus in the late 1990s?
A) A move toward virtue on Capital Hill B) Strong economic growth during that period C) Huge increases in tax rates D) A successful beggar-thy-neighbor strategy
If the economy is growing beyond potential real GDP, which of the following would be an appropriate fiscal policy to bring the economy back to long-run aggregate supply? An increase in
A) the money supply and a decrease in interest rates. B) taxes. C) oil prices. D) government purchases.
Using the information contained in Figure 4-7 above, the initial equilibrium Y is 3500. If there is 500 of new fiscal stimulus and a constant money supply, Y will increase to ________ and the interest rate will ________
A) 4000; remain constant B) 4000; rise to 10% C) 4500; rise to 12.5% D) 5500; remain constant
There are no idle resources, the multiplier is operative, and autonomous spending rises. It follows that
A) Real GDP will not increase. B) Real GDP will rise. C) prices will rise. D) a and c E) a, b, and c