If Americans decide to buy more South African diamonds, what is the effect in the exchange market?
a. It will increase the supply of U.S. dollars
b. It will decrease the supply of U.S. dollars.
c. It will increase the demand for U.S. dollars.
d. It will decrease the demand for U.S. dollars.
a
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Why is real GDP a more accurate measure of the level of production in an economy than nominal GDP? Explain with an example
What will be an ideal response?
Suppose the government imposes a price ceiling above the equilibrium price of a given good. Which of the following is the most likely result?
A) Some other rationing device will emerge to allocate the good among buyers. B) Some buyers and sellers will be willing to risk breaking the law in order to exchange the good at a price above the equilibrium price since there would be a shortage of the good at the price ceiling. C) No change will occur in the market. D) Brute force will be used to allocate the good among buyers. E) a, b, and d
Suppose there is an increase in profitability. This suggests that
A) firms have increased their expectations of future profits. B) the real interest rate has increased. C) the rate of depreciation has increased. D) all of the above
An industry demand curve faced by firms in a duopoly is P = 69 - Q, where Q = Q1 + Q2. MC for each firm is 0. How many units should each firm produce? How much money will each firm make?
What will be an ideal response?