Which of the following would cause an increase in the demand for U.S. dollars?
A. An interest rate cut in the United States
B. An interest rate cut in Europe
C. An interest rate increase in Europe
D. A recession in Europe
Answer: B
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If a country is currently lending more to the rest of the world than it is borrowing from the rest of the world, the country is a
A) net borrower. B) debtor nation. C) net lender. D) creditor nation.
Refer to Figure 14.3. To maximize economic rent, the labor union will agree to wage rate:
A) W0. B) W1. C) W2. D) W3. E) none of the above
Which of the following is most likely to lead to an increase in the demand for U.S. dollars in the foreign exchange market?
a. U.S. firms purchasing raw materials from Japan b. U.S. speculators expecting the value of the German mark to rise c. The Fed intervening in the foreign exchange market and devaluing the dollar d. Speculative outflows of money from the United States to Britain because of higher interest rates in Britain e. Japanese cars becoming more popular in the United States
If scientific research produces a technological breakthrough in the production of computer memory, then
a. business costs will increase, profits will fall, and production will decrease. b. business costs will fall, but profits will also fall, and production will decrease. c. business costs will fall, profits will improve, and production will increase. d. profits will increase because businesses will cut back production.