Suppose the United States reduced the tariff on a major imported item. Under a system of flexible rates of exchange, this would tend to
a. cause the dollar to appreciate.
b. cause the dollar to depreciate.
c. decrease the U.S. balance of trade deficit.
d. increase the current account surplus.
B
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A Swiss watch company advertises its history of superior craftsmanship. The company thinks that this would
a. Make the demand for the product less elastic b. Make the customers less sensitive to the price c. Assist them with differentiating their product d. All of the above
A conglomerate occurs when:
a. the products of the merging firms were not related in any manner before the merger b. one firm is a producer of products, and the other firm is a producer of services c. one firm is a domestic firm, and the other is a foreign company d. the firms stood in a buyer-seller relationship before the merger e. the merger partners were competitors
Is it correct to say that if the total balance of payments does not equal zero, then the reserves account will automatically adjust to ensure it equals zero
a. Yes. b. No. c. The answer is "maybe" because it always depends on the circumstances.
What is the effect of supply-side inflation on the short-run Phillips curve?
What will be an ideal response?