The exchange-rate effect is based, in part, on the idea that
a. a decrease in the price level reduces the interest rate.
b. an increase in the price level causes investors to move some of their funds overseas.
c. an increase in the price level causes domestic goods to become less expensive relative to foreign goods.
d. a decrease in the price level reduces spending on net exports.
a
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Grace just got her first cell phone, an iPhone, for graduation. She tosses her iTouch in a drawer and never touches it again, even though she could easily sell it for $75 on Craigslist. Grace's choice is ___________ because ________________.
A. rational; she weighs the $200 she paid for the iTouch and the $75 she could sell it for now B. irrational; she weighs the $200 she paid for the iTouch and the $75 she could sell it for now C. rational; she would not pay $75 to buy the iTouch today D. irrational; she would not pay $75 to buy the iTouch today
Which of the following would the Fed increase in order increase the supply of money?
a. open market purchases of government bonds b. reserve requirements c. discount rate d. all of the above
Figure 3.5 illustrates the supply of tacos. A technological advancement which makes tacos cheaper to produce would most likely cause a movement from:
A. point a to point c. B. point c to point a. C. S2 to S0. D. S0 to S2.
The average expected rate of return is a:
A. Volume-weighted average B. Price-weighted average C. Probability-weighted average D. Value-weighted average