If the dollar appreciates, it can be said that
a. foreigners respect the United States more.
b. it increases in value within the United States.
c. other currencies depreciate.
d. it takes more dollars to buy foreign currencies.
c
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Last year the price level increased from 118 to 122. The increase in the price level leads to a decrease in
A) potential GDP. B) the money wage rate. C) the buying power of money. D) the real interest rate. E) the price of domestic goods and services relative to foreign goods and services.
Assuming the free flow of capital across borders, which of the following statements is most correct?
A. A central bank cannot have both a fixed exchange rate and an independent inflation policy. B. The central banks of most industrialized countries focus on fixed exchange rates. C. While most central banks of industrialized countries favor fixing exchange rates, their primary concern is on domestic inflation. D. A central bank can have both a fixed exchange rate and an independent inflation policy.
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What will be an ideal response?
What is the gold standard?
(A) A system that uses actual gold coins as a country's money. (B) A system in which a country's money is backed with gold. (C) A money system in which the paper currency is good in more than one country. (D) A currency system in which each dollar is worth 1/20 of an ounce of gold.