Refer to the information provided in Figure 34.4 below to answer the question(s) that follow.
Figure 34.4Refer to Figure 34.4. The demand and supply of pounds are S1 and D1. Which of the following can change the equilibrium exchange rate ($/pound) to $2.50 and the equilibrium quantity to 400 pounds?
A. an increase in income in Great Britain
B. an increase in the price level in Great Britain
C. a sudden dislike of British products in the United States
D. a sudden dislike of U.S. products in Great Britain
Answer: D
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Despite the elimination of the federal budget deficit in the late 1990s, the trade deficit increased due to
a. increased household saving. b. decreased household saving. c. a depreciation of the dollar. d. an increase in inflation rates.
The direct effect of expansionary monetary policy is to:
A. reduce U.S. imports but increase the value of the dollar. B. increase both U.S. imports and the value of the dollar. C. reduce both U.S. imports and the value of the dollar. D. increase U.S. imports but reduce the value of the dollar.
Figure 9.5 represents the market for used cars. Suppose buyers are willing to pay $5,000 for a plum (high-quality) used car and $3,000 for a lemon (low-quality) used car. If buyers believe that 80% of used cars in the market are lemons (low quality), what is consumers' willingness to pay ($X)?
A. $5,000 B. $3,400 C. $3,000 D. $1,700
Which of the following was true regarding conventionally measured income inequality in the U.S. during 1968 to 2007?
A. The income share of the top 1% of income earners tripled over this period. B. There was a steady decline in the income share of the top 5% of income earners during this period. C. The income share of the top 25% of income earners remained below 60% during 1968-2007. D. The conventional measure of income inequality showed that it was significantly low during this period compared to any other time period.