Analyze the effects of an increase in the European money supply on the dollar/euro exchange rate
What will be an ideal response?
The main points are: An increase in the European money supply will reduce the interest rate on the euro, and thus causes the euro to depreciates against the dollar. The U.S. money demand and money supply are not going to be affected, and thus the interest rate in the U.S. will remain the same.
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Which of the following is one of the most important benefits of money in an economy?
a. Money allows for the exchange of goods and services. b. Money allows for the accumulation of wealth. c. Money makes exchange easier, leading to more specialization and higher productivity. d. Money encourages people to produce all of their own goods (self-sufficiency) and therefore increases economic stability.
If the marginal utilities of the first 5 candy bars are 15, 14, 10, 7, and 3, respectively, the total utility derived from consuming all 5 candy bars is
a. 5 b. –12 c. 12 d. 35 e. 49
When the top marginal tax rates were lowered substantially during the 1980s, the inflation-adjusted income tax revenue collected from the top 1 percent of all income earners
a. declined sharply. b. remained approximately constant. c. increased substantially. d. did none of the above.
Pat calculates that for every extra dollar she earns, she owes the government 33 cents. Her total income now is $35,000 . on which she pays taxes of $7,000 . Determine her average tax rate and her marginal tax rate
a. Her average tax rate is 33 percent and her marginal tax rate is 20 percent. b. Her average tax rate is 20 percent and her marginal tax rate is 33 percent. c. Her average tax rate is 20 percent and her marginal tax rate is 20 percent. d. Her average tax rate is 33 percent and her marginal tax rate is 33 percent.