Which of the following would lead to a decrease of the U.S. demand for euros?
a. A decrease in the U.S. interest rate, with no change in the European interest rate
b. An increase in U.S. GDP
c. Resurgence of interest in European precision tools
d. Expectations of a rise in the dollar price of the euro
e. A sudden increase in anti- European sentiment.
E
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What does the equilibrium of supply and demand in a market do?
a) It maximizes the prices at which producers are willing to sell. b) It minimizes the prices that consumers are willing to pay. c) It produces both an efficient and equitable market outcome. d) It maximizes the total benefits received by buyers and sellers.
As of 2013, the outstanding U.S. currency is more than $1 trillion, which suggests that the typical U.S. citizen holds $3,600 in cash. Is this an accurate inference? Why?
A) Yes; because dividing total currency by total U.S. population roughly works out to $3,600 per person. B) No; because criminals and foreigners hold large sums of dollars, so the average citizen holds far less. C) No; because the average citizen probably does not have $3,600 in her checking account. D) Yes; because the Fed rarely makes accounting mistakes when computing M1. E) none of the above