The Jordanian government might consider devaluing its currency (the dinar)
a. if domestic inflation is high
b. if Jordan has a large trade deficit
c. if Jordan has achieved full employment
d. if the dollar is appreciated
e. if Jordan has a large trade surplus
B
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Sheena gets her paycheck on the first day of every month and spends it over the month to purchase various goods and services. What are the functions that money is performing in this case?
What will be an ideal response?
Market prices are
a. conveyors of information. b. determined by the interactions of supply and demand in voluntary exchange. c. indicators of the relative scarcity of resources and products. d. all of the above.
The predictive accuracy of relative purchasing power parity improves if:
a. Both countries have highly mobile capital markets. b. Both countries have central bank controls in place so that exchange rates change in an orderly manner. c. Both countries under consideration have very high inflation rates. d. Both countries under consideration have high growth rates. e. Both countries are either developed or undeveloped (i.e., one is not developed and the other undeveloped).
As trade restrictions are eliminated, increased imports
A. Shift the allocation of resources away from import-competing industries. B. Leave the composition of the GDP unchanged. C. Redistribute income out of import-using industries. D. Lower competition in product markets.