Which of the following statements is CORRECT?
I. The exchange rate is a price.
II. The exchange rate is different from other prices because it is NOT determined by supply and demand.
A) only I
B) only II
C) I and II
D) neither I nor II
A
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Refer to Figure 9-5. The tariff causes domestic consumption of coffee
A) to fall by 7 million pounds. B) to rise by 6 million pounds. C) to fall by 27 million pounds. D) to rise by 20 million pounds.
Suppose that short skirts that were fashionable in the 1990s become unfashionable in the late 2000s. If other factors were held constant, then there would be
A) a rightward movement along the supply curve. B) a rightward shift of the demand curve. C) a leftward shift in the demand curve. D) a leftward movement along the supply curve.
Mutual funds that invest only in companies that meet certain criteria and usually exclude companies that produce tobacco, weapons, or alcoholic beverages are known as:
a. socially responsible funds. b. global funds. c. equity funds. d. fixed-income funds. e. money market funds.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index rises, and current international transactions become more negative (or less positive). b. The GDP Price Index rises, and current international transactions become more positive (or less negative). c. Real GDP Price Index falls, and current international transactions rises. d. There is not enough information to determine what happens to these two macroeconomic variables. e. The GDP Price Index falls, and current international transactions remain the same.