When the demand and supply of a good both shift in the same direction and amount:
a. Price will change in the same direction as the shifts in supply and demand
b. Price will change in the opposite same direction as the shifts in supply and demand. change in price and an increase in quantity exchanged.
c. Quantity exchanged will change in the same direction as that of the shifts in supply and demand.
d. Quantity exchanged will change in the opposite direction from that of the shifts in supply and demand
c
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The principle involved in short-run uncovered interest parity is that home interest rates will be equal to:
A) the world equilibrium real rate of interest. B) the foreign interest rate minus foreign inflation. C) the foreign rate of interest plus the expected rate of depreciation of the home currency. D) the domestic nominal rate of interest plus domestic inflation.
It may be unrealistic to assume that consumer tastes are the same across nations and invariant with respect to income:
A. so it is not one of the HO assumptions. B. but it is an HO assumption because it enables the analysis to focus on other issues that drive trade and prices. C. but it actually is true so it is an HO assumption. D. and it is not an HO assumption because consumer tastes within a nation are not relevant to international trade.