A Japanese automobile manufacturer building an auto plant in the United States creates a
a. supply of dollars and demand for yen in the foreign exchange market.
b. demand for dollars and a supply of yen in the foreign exchange market.
c. demand for both dollars and yen in the foreign exchange market.
d. supply of both dollars and yen in the foreign exchange market.
B
Economics
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Under a fixed exchange rate regime, if the domestic currency is initially undervalued, that is, above par, the central bank must intervene to sell the ________ currency by purchasing ________ assets
A) domestic; foreign B) domestic; domestic C) foreign; foreign D) foreign; domestic
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In the Keynesian model, a firm's high menu costs cause
A) real-wage rigidity. B) full employment. C) price stickiness. D) efficiency wages.
Economics