Suppose we were analyzing the Turkish lira per euro foreign exchange market. If Turkey's central bank intervenes to reduce the value of the euro, then:
a. The supply of euros in the foreign exchange market rises, and Turkey's monetary base rises.
b. The supply of euros in the foreign exchange market rises, and Turkey's monetary base falls.
c. The demand for euros in the foreign exchange market rises, and Turkey's monetary base rises.
d. The demand for euros in the foreign exchange market rises, and Turkey's monetary base falls.
e. The demand for euros in the foreign exchange market rises, and Turkey's monetary base remains unchanged.
.B
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If a market is in disequilibrium, economists would predict that the product's price would __________ to reach equilibrium when the quantity demanded is __________ than the quantity supplied
A) rise; greater B) fall; less C) fall; greater D) rise; less E) a and b
Which of the following best illustrates the circular flow model in action?
A. Bobbie goes to work and builds cars, and uses the income she receives to buy food at the grocery store. B. Evan buys a new couch; the owner of the furniture store uses some of the money from the sale to pay her supplier, and uses the rest to take her family out to dinner. C. Boeing experiences a surge in orders for new airplanes, prompting the company to hire more workers. D. All of these answers illustrate the workings of the circular flow model.
Suppose that in a month the price of movie rentals increases from $2 to $2.20. At the same time, the quantity of movie rentals supplied increases from 100 to 110. The price elasticity of supply for movie rentals (calculated using the initial value formula) is:
A. negative. B. inelastic. C. unit elastic. D. elastic.
The most accurate way to compare standards of living throughout the world is to look at
A. total Gross Domestic Product (GDP). B. foreign exchange rates. C. GNP. D. purchasing power parity.