The demand curve for euros (in terms of U.S. dollars) is ________.
A. downward-sloping because, at lower dollar prices for euros, Americans will want to buy more European goods and services
B. downward-sloping because the dollar price of euros and the euro price of dollars are directly related
C. downward-sloping because, at higher dollar prices for euros, Americans will want to buy more European goods and services
D. upward-sloping because a higher dollar price of euros makes European goods and services more attractive to Americans
Answer: A
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The main reason that many businesses fail when the price level is falling is that ________
A) deflation causes a decline in short-run aggregate supply B) as prices fall, businesses are unable to predict the quantity of output they will be able to sell C) the real value of the firms assets declines in proportion to the decrease in the price level D) falling prices mean that regular loan payments become increasingly difficult
A downward-sloping demand curve illustrates
a. that demand decreases over time. b. that prices fall over time. c. the relationship between income and quantity demanded. d. the law of demand.
In the above figure, if the interest rate is 2 percent per year, the quantity of money demanded is
A) greater than the quantity of money supplied, and the interest rate will change. B) greater than the quantity of money supplied, and the demand for money curve will shift. C) greater than the quantity of money supplied, and the supply of money curve will shift. D) less than the quantity of money supplied, and the interest rate will change. E) less than the quantity of money supplied, and the demand for money curve will shift.
If taxes fall and foreign income falls, what will happen to output, ceteris paribus?
A) It will rise. B) It will stay the same. C) It will fall. D) It is uncertain what will happen.