Answer the following statements true (T) or false (F)
1. Specialization based on comparative advantage will shift a nation's production possibilities curve outwards.
2. Through international trade an economy can consume a combination beyond its domestic production possibilities curve.
3. If the U.S. dollar depreciates against the euro, then it will be easier for U.S. exporters to sell their products in Europe.
4. In the dollar/yen market, if the supply of yen increases other things being equal, the dollar will appreciate.
5. Relatively high rates of U.S. inflation compared to other countries will increase the supply of, and decrease the demand for, dollars in foreign exchange markets.
1. F
2. T
3. T
4. T
5. T
You might also like to view...
If the federal funds rate is set by the Taylor rule and the output gap increases by 5 percentage points, everything else remaining unchanged, the federal funds rate should ________
A) decrease by 2.5 percentage points B) decrease by 5 percentage points C) increase by 5 percentage point D) increase by 2.5 percentage points
The demand for money increases and the demand curve for money shifts rightward as a result of
A) an increase in real GDP. B) a decrease in the price level. C) a decrease in the nominal interest rate. D) an increase in the use of credit cards. E) a decrease in the real interest rate.