An increase in foreign demand for U.S. exports will ____ demand for the dollar, causing the dollar to ______.
Fill in the blank(s) with the appropriate word(s).
increase; appreciate
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U.S. sugar trade agreements have fallen through. What will the likely effect be?
A. The demand for goods that use sugar will decrease. B. The demand for goods that use sugar will increase. C. The supply of goods that use sugar will increase. D. The supply of goods that use sugar will decrease.
The zero-lower-bound problem eliminates the ability of the central bank to use which of the following in implementing policy?
A) open market operations B) discount lending C) the federal funds rate D) the required reserve ratio
What should be the impact on the U.S. interest rates if the Fed undertakes a sterilized foreign exchange intervention? Be sure to explain your answer.
What will be an ideal response?
Figure 5-2
illustrates the market for a product that generates an external cost. S1 is the private market supply curve, while S2 is the supply curve including the external cost. Which of the following is true?
a.
Point a illustrates the competitive private market outcome, while point b illustrates the outcome consistent with economic efficiency.
b.
Point b illustrates the competitive private market outcome, while point a illustrates the outcome consistent with economic efficiency.
c.
The competitive private market outcome is consistent with the conditions for economic efficiency.
d.
The good will tend to be undersupplied relative to the conditions for economic efficiency.