Other things the same, if foreign residents desired to purchase more U.S. wheat
a. the exchange rate and net exports would rise.
b. the exchange rate would rise and net exports would be unchanged.
c. the exchange rate would fall and net exports would be unchanged.
d. the exchange rate would fall and net exports would rise.
b
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When the Fed lowers the federal funds rate, which of the following economic variables responds most rapidly?
A) other short-term interest rates B) consumption expenditure C) the supply of loanable funds D) the long-term real interest rate E) the inflation rate
Refer to the diagram in which S is the market supply curve and S 1 is a supply curve comprising all costs of production, including external costs. Assume that the number of peopleaffected by these external costs is large. If the government wishes to
establish an optimal allocation of resources in this market, it should:
A. not intervene because the market outcome is optimal.
B. subsidize consumers so that the market demand curve shifts leftward.
C. subsidize producers so that the market supply curve shifts leftward (upward).
D. tax producers so that the market supply curve shifts leftward (upward).