Which of the following statements best describes the impact of a higher interest rate?
a. A higher interest rate will attract an inflow of foreign financial capital and depreciate the exchange rate in response to the increase in demand for U.S. dollars by foreign investors and a decrease in supply of U.S. dollars.
b. A higher interest rate will attract an inflow of foreign financial capital and appreciate the exchange rate in response to the increase in demand for U.S. dollars by foreign investors and an increase in supply of U.S. dollars.
c. A higher interest rate will attract an inflow of foreign financial capital and appreciate the exchange rate in response to the increase in demand for U.S. dollars by foreign investors and a decrease in supply of U.S. dollars.
d. A higher interest rate will attract an inflow of foreign financial capital and depreciate the exchange rate in response to the increase in demand for U.S. dollars by foreign investors and a increase in supply of U.S. dollars.
c. A higher interest rate will attract an inflow of foreign financial capital and appreciate the exchange rate in response to the increase in demand for U.S. dollars by foreign investors and a decrease in supply of U.S. dollars.
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If growth in the United States speeds up so that investors believe they can make a bigger profit from U.S. assets, the ________ U.S. dollars will ________
A) demand for; increase B) demand for; decrease C) supply of; increase D) supply of; decrease
Benefits of a project
A. can change over time. B. can be difficult to measure. C. should be larger than costs. D. are sometimes intangible. E. all of these answer options are correct.
In the Keynesian model, an increase in real autonomous spending results in a greater increase in real Gross Domestic Product (GDP) if
A) the marginal propensity to consume (MPC) is lower.
B) the marginal propensity to consume (MPC) is higher.
C) the average propensity to save (APS) is higher.
D) the average propensity to save (APS) is lower.
Which statement is true?
A. If the APC is greater than one, the APS is negative. B. If the APC is less than one, the APS is negative. C. The APS can never be negative. D. None of these statements are true.