Figure 10-6
In Figure 10-6, the price at long-run equilibrium is
a.
$5.
b.
$10.
c.
$20.
d.
$35.
c
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Which of the following is not correct for a small open economy?
A) She cannot improve her BOT. B) She cannot affect the international price of goods. C) She cannot affect the foreign interest rate. D) All of the above.
Which of the following would shift the supply of dollars in the market for foreign-currency exchange of the open-economy macroeconomic model to the left?
a. the exchange rate rises b. the exchange rate falls c. the expected rate of return on U.S. assets rises d. the expected rate of return on U.S. assets falls
Which of the following economic forces promotes profitability in the long run?
A. A large number of complementary products B. Existence of strong barriers to entry. C. A large number of close substitute products. D. Both a and b E. All of the above
An decrease in Italy's interest rate and an decrease in Italy's price level relative to U.S. price level have the same effect on the exchange rate between the two countries.
Answer the following statement true (T) or false (F)