If the exchange rate rises as shown by the arrow in the figure above, the price of imports coming into the United States will be ________, Americans will supply ________ dollars in order to get the foreign exchange to purchase ________ imported goods
.
A) higher; more; more
B) lower; more; more
C) lower; fewer; more
D) lower; fewer; fewer
E) higher; fewer; more
The figure above shows supply curves of dollars in the foreign exchange market.
B
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An entrepreneur
a. always makes a profit b. generally avoids risky situations c. claims the residual (i.e., whatever is left over) after other resource suppliers are compensated d. is a parasite that benefits by not paying other resources for their services e. is the manager who runs an enterprise and keeps the customers happy
Assuming sticky prices and given expectations of future exchange rates, what is the short-run effect on the exchange rate of the U.S. dollar (purchasing euros) and on domestic and foreign rates of return if there is a temporary increase in the quantity of euros?
a. Rates of return on domestic and foreign assets diverge, as the dollar appreciates. b. Domestic and foreign rates of return both fall, as the dollar depreciates. c. Domestic and foreign rates of return converge, as depreciation of the euro raises r turns for U.S. investors who purchase euro-based assets. d. Rates of return on dollar assets fall, causing investors to switch into euro assets and, therefore, the U.S. dollar depreciates against the euro
Which of the following observations concerning the Keynesian model is not true? a. It is helpful in explaining the events that unfolded in the 1930s
b. It is less useful in explaining today's economy. c. It explains the stagflation of the 1970s. d. It does not incorporate possible shifts in the aggregate supply curve.
Banks will hold additional excess reserves when
a. loans to customers look safe and interest rates are high. b. they anticipate a bank audit. c. loans to customers look risky and interest rates are low. d. the economy is booming and there is a large demand for loans.