What will happen to the exchange rate between the British pound and the U.S. dollar if British prices increase?
What will be an ideal response?
British price increases will decrease the supply of dollars, so all else equal the dollar will appreciate in value relative to the pound. British price increases will also decrease the demand for British pounds in the United States.
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Which of the following macroeconomic variables is not in the equation of exchange?
a. GDP price index. b. Real GDP. c. Real exchange rate. d. Money supply. e. All of the above are part of the equation of exchange.
A variable (price or quantity) that cannot be predicted with any certainty is said to be ______.
a. positive b. stable c. negative d. indeterminate
If people's real assets increase, then the:
A. economy will move to the right along the existing consumption function. B. economy will move to the left along the existing consumption function. C. consumption function will shift down. D. consumption function will shift up.
Suppose that Brazil is capital abundant and Chile is natural resource abundant. If timber is natural resource intensive and computers are capital intensive, then according to the Stolper-Samuelson Theorem, the incomes of the owners of ________ are likely to rise in Brazil after trade with Chile begins
A) capital B) labor C) natural resources D) It is impossible to determine which will be favored.