What would be the effect of an increase in the European Money Supply in the Dollar Euro Exchange Rate?
What will be an ideal response?
An increase in the European money supply lowers the dollar return on Euro deposits, i.e. the dollar appreciates against the Euro. There is no change in the US money market.
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Which of the following is a similarity between a first-price sealed-bid auction and a Dutch auction?
A) Bids are placed privately in both the auctions. B) Bids are placed publicly in both the auctions. C) Bidders place their bids simultaneously in both the auctions. D) The winner pays an amount equal to his bid in both the auctions.
Explain why it may make sense for the United States, Japan, and Europe to allow their mutual exchange rate to float?
What will be an ideal response?
The demand curve a monopolist uses in making an output decision is
a. the same as the demand curve facing a perfectly competitive firm b. vertical because there are no close substitutes for its product c. horizontal because there are no close substitutes for its product d. the same as the market demand curve e. perfectly inelastic
One bag of flour is sold for $1.50 to a bakery, which uses the flour to bake bread that is sold for $4.00 to consumers. A second bag of flour is sold to a consumer in a grocery store for $2.00 . Taking these three transactions into account, what is the effect on GDP?
a. GDP increases by $1.50. b. GDP increases by $3.50. c. GDP increases by $6.00. d. GDP increases by $7.50.