An increase in the domestic one-year interest rate expected to occur in, say, two years will, all else fixed, have which of the following effects in a flexible exchange rate regime?
A) The real exchange rate will increase with no change in the nominal exchange rate.
B) The nominal exchange rate will increase with no change in the real exchange rate.
C) Both the real and nominal exchange rate will increase.
D) No change in either the nominal or real exchange rate.
C
Economics
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When demand is price inelastic,
a. price and total revenue move in the same direction. b. price and total revenue move in the opposite direction. c. total revenue increases whether price goes up or down. d. total revenue decreases whether price goes up or down.
Economics
If demand for Tesla automobiles rises in an area where incomes have increased, this tells us that a Tesla is
A) a normal good. B) an inferior good. C) a complementary good. D) a substitute good.
Economics