A devaluation of the exchange rate is a policy action that
A) increases the real exchange rate.
B) decreases the real exchange rate.
C) increases the nominal exchange rate.
D) decreases the nominal exchange rate.
C
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All else equal, if the risk associated with U.S. stocks is perceived to have fallen compared to financial assets in other countries, then the market equilibrium value of the exchange rate for the U.S. dollar will:
A. rise. B. be equal to the value chosen by the Federal Reserve. C. become fixed. D. fall.
A(n) ________ is a subsidiary of a U.S. bank that is engaged primarily in international banking
A) Edge Act corporation B) Eurodollar agency C) universal bank D) McFadden corporation
Suppose the Federal Reserve increases the money supply. Which of the following will tend to occur as a result of this policy in a Keynesian model?
A) an inflationary gap B) demand-pull inflation C) a movement along the short-run aggregate supply curve D) all of the above
Suppose that a new drug has been approved to treat a life-threatening disease. The demand for that drug is shown on the graph below. Prior to approval of this drug, the only treatment for this condition was any one of several non-prescription, or over-the-counter, pain relievers. The demand for one brand of the several non-prescription pain relievers is also shown on the graph. The manufacturer of the new drug would ________ total revenue by increasing the price from $15 to $16.
A. experience no change in B. decrease C. experience an uncertain change in D. increase