Today, the dollar is worth 1.15 euros. Due to changes in economic conditions, people expect that the dollar will be worth 1.20 euros in the next month. This belief
A) increases the demand for dollars.
B) decreases the demand for dollars.
C) increases the demand for euros.
D) increases the value of exports to Europe.
A
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In order to make oil profits as large as possible, OPEC meets to set oil production quotas for its members. OPEC is best classified as a:
a. monopoly. b. cartel. c. kinked demand industry. d. price-leadership industry.
If there is a sudden increase in government spending, which of the following should the Fed do if it wants to keep the price level steady?
a. Do nothing, since the self-correcting mechanism will adjust the economy b. Sell bonds in the open market c. Wait, since the price level usually does not change when government spending increases d. Decrease the required reserve ratio e. Buy bonds in the open market