1) In the foreign exchange market, an increase in the world demand for U.S. exports shifts
a) demand curve for U.S. dollars rightward
b) supply curve for U.S. dollars rightward
c) supply curve for U.S. dollars leftward
d) demand curve for U.S. dollars leftward
I think this one is b.
2) The greater the demand for U.S. exports, the
a) smaller is the demand for U.S. dollars.
b) larger is the demand for non-U.S. currencies.
c) larger is the current account deficit.
d) larger is the demand for U.S. dollars.
I think this one is d.
3) If the prices in the United States rise faster than those in other countries, in the LONG RUN
a) the interest rate in the United States falls.
b) the exchange rate rises.
c) then interest rate parity must not hold.
d) the exchange rate falls.
I think this one would be b.
-Thanks for any help.
a) demand curve for U.S. dollars rightward
b) supply curve for U.S. dollars rightward
c) supply curve for U.S. dollars leftward
d) demand curve for U.S. dollars leftward
I think this one is b.
2) The greater the demand for U.S. exports, the
a) smaller is the demand for U.S. dollars.
b) larger is the demand for non-U.S. currencies.
c) larger is the current account deficit.
d) larger is the demand for U.S. dollars.
I think this one is d.
3) If the prices in the United States rise faster than those in other countries, in the LONG RUN
a) the interest rate in the United States falls.
b) the exchange rate rises.
c) then interest rate parity must not hold.
d) the exchange rate falls.
I think this one would be b.
-Thanks for any help.