Which of the following could have led to the shifts illustrated in the figure above?
i. The U.S. exchange rate was expected to depreciate between 2001 and 2009.
ii. The U.S. exchange rate was expected to appreciate between 2001 and 2009.
iii. The U.S. interest rate rose relative to interest rates in other countries between 2001 and 2009.
A) i only B) ii only C) iii only D) i and iii E) ii and iii
A
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According to the equation of exchange, nominal GDP equals
A) the amount of actual money balances divided by the income velocity of money. B) the price level divided by the income velocity of money. C) the amount of actual money balances times the income velocity of money. D) the price level times the income velocity of money.
In 1982 the CEO of American Airlines spoke on the telephone to the CEO of Braniff Airlines. The CEO of American Airlines proposed that the two airlines fix prices. The CEO of Braniff Airlines rejected the proposal. The CEO of American Airlines:
A) was within his 1st Amendment right to free speech. B) was in violation of the antitrust laws which prohibit price fixing. C) was in violation of the antitrust laws which prohibit predatory pricing. D) Both B and C are correct. E) None of the above is necessarily correct.