The dollar is regarded as the "safe haven" currency; investors flock to it when they are worried about the outlook for the global economy
Fears were at their greatest in late 2008 and early 2009 after the collapse of the Lehman Brothers investment bank in September 2008. As investors flocked to the dollar A) the demand for dollars increased and the exchange rate increased.
B) the demand for dollars decreased and the exchange rate decreased.
C) the supply of dollars increased and the exchange rate decreased.
D) the supply of dollars decreased and the exchange rate increased.
A
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In the classical model, a change in aggregate demand
A) causes changes in both the long-run real GDP and in the price level. B) causes a change in long-run real GDP but not in the price level. C) causes a change in the price level but not in the long-run real GDP. D) has no effect on either real GDP or the price level.
Levying a tariff on an imported good
A) shifts the demand curve down for the good. B) shifts the supply curve up for the good. C) Both A and B. D) Not enough information to determine.