The multiplier tells us the relationship between
A. the exchange rate and the level of imports.
B. the interest rate and the level of investment expenditure.
C. a change in autonomous spending and the resulting change in equilibrium real GDP.
D. the exchange rate and the level of exports.
Answer: C
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In an open economy, why is the demand curve for dollars in the foreign-currency exchange market downward sloping?
A. A depreciation in the domestic currency causes exports to fall and imports to rise and, therefore, net exports to fall. B. A depreciation of the dollar reduces the quantity of dollars demanded in the market for foreign-currency exchange. C. When the value of the domestic currency depreciates, domestic goods become less expensive relative to foreign goods, making domestic goods more attractive to domestic and foreign consumers. D. Net capital outflow equals net exports.
In the figure above, when the price falls from $5 to $4, the price elasticity of demand is
A) 2. B) 3. C) 0.75. D) 1.5. E) 0.33.
The people of the Island of Yap used stones as a general medium of exchange. Therefore,
A) their economic system was based upon barter. B) their stones served as money. C) they had no price system, because prices can't be measured with stones. D) inflation was impossible.
What is Rawlsian justice?
What will be an ideal response?