A major cause of volatility in the value of the U.S. dollar is ________
A) foreign exchange interventions by the U.S. Treasury
B) change in U.S. net exports
C) change in the expected value of the dollar
D) disagreement among policy makers
C
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"Although the United States is running a large current account deficit, it is still ranked as a major international net lender." Is the previous statement correct or incorrect? Briefly explain your answer
What will be an ideal response?
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to real GDP and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. Real GDP rises, and nominal value of the domestic currency rises. b. Real GDP rises, and nominal value of the domestic currency falls. c. Real GDP rises, and nominal value of the domestic currency remains the same. d. Real GDP falls, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
A Nash equilibrium is the:
A. output level that minimizes average total cost. B. strategy that maximizes the outcome of all the players. C. payoff that maximizes the joint payoff. D. set of strategies such that no player can improve his or her position by changing his or her own action.
In the United States, the central bank is the:
A. National Bank of the United States. B. Congressional Budgeting Office. C. Federal Reserve. D. Treasury.