Exchange rates are important because
A) They affect the affordability of imports
B) they make exports either more or less expensive for foreign buyers
C) They affect the value of foreign assets and their returns
D) all of the above
Ans: D) all of the above
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If the dollar depreciates against the Indian rupee,
A) Indian imports to the U.S. become less expensive. B) The value of Indian imports to the United States does not change. C) U.S. exports to India become less expensive. D) U.S. exports to India become more expensive.
Which of the following institutions is the most important participant in foreign currency markets?
A) A retail customer B) A commercial bank C) A foreign exchange broker D) A central bank E) None of the above.
Economics is best described as the
a. study of choice when scarcity exists b. study of the production of goods and services c. theory of consumer behavior d. science of money e. art of spending money wisely
Which of the following mechanisms helps output to return to potential after a demand shock?
a. Change in business mentality b. Change in nominal wage rate c. Large changes in the capital stock d. Inability of the price level to change e. Change in inventories