If the exchange rate rises, the quantity of dollars demanded
A) increases and there is movement down along the demand curve for dollars.
B) decreases and there is movement down along the demand curve for dollars.
C) decreases and there is movement up along the demand curve for dollars.
D) increases and there is movement up along the demand curve for dollars.
E) does not change.
C
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How does the ECB choose to define price stability?
A) Eurozone consumer price inflation of less than but close to 2% per year over the medium term B) consumer price inflation of greater than but close to 3% per year over the medium term in all Eurozone countries C) Eurozone consumer price inflation equal to 0% per year over the medium term D) Eurozone consumer price inflation less than but close to 5% per year over the medium term
All else equal, if the risk associated with U.S. stocks is perceived to have fallen compared to financial assets in other countries, then the market equilibrium value of the exchange rate for the U.S. dollar will:
A. rise. B. be equal to the value chosen by the Federal Reserve. C. become fixed. D. fall.