What will be the likely effect of an increase in the demand for American goods in the markets of Mexico on the demand for dollars and the exchange rate between dollars and pesos?
What will be an ideal response?
An increase in the demand for American goods in the markets of Mexico will result in an increase in the demand for dollars. This will cause the dollar to appreciate and the peso to depreciate.
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In the above figure, a price of $1.25 and a quantity of 5 million gallons of milk per day maximizes the
A) amount of consumer surplus. B) amount of producer surplus. C) sum of consumer surplus and producer surplus. D) All of the above answers are correct.
Where does the short-run Phillips curve intersect the long-run Phillips curve?
A) at the point where actual inflation is equal to expected inflation B) at the point where the rate of inflation and the unemployment rate are equal C) at the natural rate of inflation D) There is no intersection between the short-run and long-run Phillips curves.
Between 2003 and 2008, the actual federal funds rate
A) tended to be lower than the rates predicted by the Taylor rule. B) tended to higher than the rates predicted by the Taylor rule. C) followed closely the rates predicted by the Taylor rule. D) moved in directions opposite to the rates predicted by the Taylor rule.
A local park filled with picnickers is
a. excludable and rival in consumption. b. excludable and not rival in consumption. c. not excludable and rival in consumption. d. not excludable and not rival in consumption.