In the open-economy macroeconomic model, if the supply of loanable funds shifts left
a. the interest rate rises and the supply of dollars in the market for foreign currency exchange shifts right.
b. the interest rate rises and the supply of dollars in the market for foreign currency exchange shifts left.
c. the interest rate falls and the demand for dollars in the market for foreign currency exchange shifts right.
d. the interest rate falls and the demand for dollars in the market for foreign currency exchange shifts left.
b
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Answer the following statements true (T) or false (F)
1. Price elasticity of demand tends to be greater for substitute items than for complementary goods. 2. If income increases and the demand for a product increases, the product is a normal good. 3. The more substitutes for a good, the more elastic its demand tends to be. 4. The total quantity of a good offered for sale is unaffected by estimates by sellers of the probable costs of producing the good in the future. 5. The total quantity of a good offered for sale is unaffected by estimates by sellers of the probable costs of producing the good in the future.
Nations which experience relatively high rates of inflation
A. cause inflation in other nations when they export their relatively high priced goods to these nations. B. will experience a reduction in the value of their currencies in the foreign exchange markets. C. will not be able to export products if their currencies depreciate in value. D. will not be able to import products unless their currencies depreciate in value.