Refer to the graph below. An increase in the demand for yen will result in:
Assume that Japan and the United States are engaged in a system of flexible exchange rates.
A. A depreciation of the Japanese yen
B. An appreciation of the U.S. dollar
C. A depreciation of the U.S. dollar
D. A decrease in the dollar price of yen
C. A depreciation of the U.S. dollar
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In a two-period model with production, an increase in the world real interest rate
A) increases domestic output and increases the current account surplus. B) increases domestic output and decreases the current account surplus. C) decreases domestic output and increases the current account surplus. D) decreases domestic output and decreases the current account surplus.
In cities with rent controls, the actual rents paid can be higher than the legal maximum. One explanation for this is
A) rent control laws are so complicated that landlords and tenants may not be aware of what the legal price is. B) landlords are allowed to charge more than the legal maximum on some apartments so long as they charge less on others. C) because there is a shortage of apartments, tenants often are willing to pay rents higher than the law allows. D) the legal penalty landlords face for charging more than the legal maximum rent is less than the revenue earned by charging their tenants more than the maximum rent.