The equilibrium exchange rate is 0.70 euros per dollar. At this exchange rate, the quantity demanded equals the quantity supplied and is $1.3 trillion a day. If the exchange rate is now 0.80 euros per dollar, then
A) there is a shortage of dollars and the exchange rate falls.
B) there is no change.
C) there is a surplus of dollars and the exchange rate falls.
D) there is a surplus of dollars and the exchange rate rises.
E) there is a shortage of dollars and the exchange rate rises.
C
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A subsidy
a. used in an abatement equipment market can achieve an efficient solution if the subsidy is set equal to the MEB at QE b. on pollution reduction activity encourages firms to reduce pollution below a predetermined standard c. on abatement equipment can create bias by changing the relative prices of various abatement technologies d. all of the above e. (a) and (b) only
One year before maturity the price of a bond with a principal amount of $1,000 and a coupon rate of 5% paid annually fell to $981. The one year interest rate must be
A. 8.5%. B. 7.0%. C. 5.0%. D. 1.9%.
Government saving refers to ________
A) tax revenues minus transfers minus government purchases B) tax revenues plus transfers minus government consumption C) the saving rate times transfers D) national plus private saving E) none of the above
The slope of the budget constraint line is:
a. the ratio of the prices (px/py). b. the negative of the ratio of the prices (px/py). c. the ratio of income divided by price of y (I/py). d. none of the above.