Holding everything else unchanged, higher interest rates in foreign countries relative to interest rates
A) increase the demand and reduce the supply of dollars leading to an increase in the exchange rate.
B) decrease the demand and the supply of dollars leading to an decrease in the exchange rate.
C) increase the demand and the supply of dollars leading to an increase in the exchange rate.
D) decrease the demand and increase the supply of dollars leading to a decrease in the exchange rate
Ans: D) decrease the demand and increase the supply of dollars leading to a decrease in the exchange rate
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Refer to Figure 23-2. Suppose that the level of GDP associated with point N is potential GDP. If the U.S. economy is currently at point K,
A) firms are operating above capacity. B) the economy is in recession. C) the level of unemployment is equal to the natural rate. D) the economy is at full employment.
In a closed economy, what does (Y - T - C) represent?
a. national saving b. government tax revenue c. public saving d. private saving