An appreciation of the U.S. dollar
A) makes our exports more expensive in terms of foreign currency and imports cheaper in terms of the dollar, increasing net exports.
B) makes our exports more expensive in terms of foreign currency and imports cheaper in terms of the dollar, decreasing net exports.
C) makes our exports less expensive in terms of foreign currency and imports cheaper in terms of the dollar, increasing net exports.
D) makes our exports less expensive in terms of foreign currency and imports cheaper in terms of the dollar, decreasing net exports.
B
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You can borrow $5000 to finance a new business venture. This new venture will generate annual earnings of $251. The maximum interest rate that you would pay on the borrowed funds and still increase your income is
A) 25%. B) 12.5%. C) 10%. D) 5%.
Answer the following questions true (T) or false (F)
1. The relationship between GDP and the money supply has gotten stronger since the 1980s. 2. The Fed has adopted an interest rate target for most of the time since World War II. 3. Inflation targeting allows monetary policy to focus on inflation and inflation forecasts except during times of severe recession.