In foreign exchange markets, the effect of an increase in the supply of dollars on the value of the dollar is the same as that of:
a. an increase in the supply of foreign currencies.
b. a decrease in the supply of foreign currencies.
c. a decrease in the demand for dollars
d. either (b) or (c)
d
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Assume an economy begins with zero inflation, a 25 percent income tax rate, and a real interest rate of 4 percent
If inflation rises to 4 percent, the nominal interest rate becomes ________ percent and the after-tax real interest becomes ________ percent. A) 8; 6 B) 8; 2 C) 0; 1 D) 8; 4 E) 6; 2
For a perfectly competitive firm, price is the same as
A) marginal revenue. B) average variable cost. C) total revenue. D) Both answers A and B are correct.
A relatively steep demand curve indicates that
a. quantity demanded will adjust only slightly to a price change. b. quantity demanded will adjust significantly to a price change. c. quantity demanded will not adjust to a price change. d. the change in quantity demanded will exactly equal a change in price.
Which of the following is true?
A. Investments that pay a return over a longer time horizon generally have less risk. B. Risk-free investments are the best benchmark for measuring the risk of all investment strategies. C. Investments with a greater variance in the size of the future payoff generally pay a lower expected return. D. Investments with higher risk generally have a higher expected return than risk-free investments.