If people in the United States buy more of a foreign good when its price falls, then
A) the demand curve for U.S. dollars will slope up.
B) the supply curve for U.S. dollars will slope up.
C) the exchange rate will increase when there is inflation.
D) fixed exchange rates will make foreign exchange markets more efficient.
B
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Assume that the inflation rate in an economy is measured on the vertical axis and the annualized growth rate of money supply minus the annualized growth rate of real GDP is measured on the horizontal axis on a graph
If a curve is plotted to establish the relationship between both variables, the curve is likely to be: A) vertical. B) upward sloping. C) horizontal. D) downward sloping.
When the demand and supply of grapes both increase at the same time, we can safely predict that the: a. price of grapes will fall
b. price of grapes will rise. c. quantity of grapes exchanged will fall. d. quantity of grapes exchanged will rise.
Demand-pull inflation is
A. inflation caused by increases in aggregate demand that generate an even larger increase in aggregate supply. B. inflation caused by reductions in short-run aggregate supply. C. inflation caused by reductions in long-run aggregate supply. D. inflation caused by increases in aggregate demand that are not matched by increases in aggregate supply.
The quantity theory of the demand for money states that a country's money demand is proportional to
A. the domestic interest rate. B. the exchange rate. C. the money value of gross domestic product. D. the level of domestic consumption.