A higher exchange rate value of the dollar reduces inflation but has a contractionary effect on the economy.
Answer the following statement true (T) or false (F)
True
A higher dollar exchange rate reduces import prices, in turn reducing inflation, but it also lowers foreign demand for domestic goods or exports, which reduces GDP.
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Trade theory suggests that Japan would gain from a subsidy the United States provides its grain farmers if the gains to Japanese consumers of wheat products more than offsets the losses to Japanese wheat farmers. This would occur as long as Japan
A) is a net importer in bilateral trade flows with the United States. B) is a net importer of wheat. C) has a comparative advantage in wheat. D) has an absolute advantage in producing wheat. E) is involved in intra-industry trade with the United States.
If the required reserve ratio is .10, demand deposits are $200 million, and total reserves are $40 million, then excess reserves are
A) $20 million. B) $40 million. C) $400 million. D) $2,000 million.
Under the gold standard of the Great Depression, any country experiencing a balance of payment deficit was expected to finance those deficits by exporting gold
The loss of gold should be followed by contractionary monetary policy, reducing demand and causing prices to fall. All countries operating under the gold standard followed these rules of the game throughout the Great Depression. Indicate whether the statement is true or false
Under oligopolistic market conditions,
a. the pricing actions of any one firm have no significant effect on the others. b. the pricing actions of any one firm have a significant effect on the others. c. no firm can have any control over its output price. d. all firms have identical prices for their products.