Which of the following would shift the supply of dollars in the market for foreign-currency exchange of the open-economy macroeconomic model to the left?
a. the exchange rate rises
b. the exchange rate falls
c. the expected rate of return on U.S. assets rises
d. the expected rate of return on U.S. assets falls
c
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Which of the following will result from an epizootic affecting sheep reared for wool?
a. The epizootic would lower people's preference for woolen clothes. b. The price of new woolen clothes would rise. c. The epizootic would lower people's preference for synthetic coats. d. The production of new woolen clothes would rise.
Which is the accurate statement?
A. There is no evidence that there is such a thing as global warming. B. By the end of the century, most of the cities on the east coast and the west coast will be under water. C. The effects of global warming are uncertain. D. Scientific opinion is virtually unanimous about the effects of global warming.
Which of the following is a private owner prohibited from doing?
What will be an ideal response?
With flexible exchange rates
A. The balance of trade is zero. B. The equilibrium exchange rate is determined in a foreign exchange market. C. All countries will run either a trade surplus or trade deficit. D. Foreign exchange reserves are used to offset balance-of-payment deficits.