In the short-run macro model, which of the following is the cause of cyclical unemployment?
a. It takes time for people to move to new jobs.
b. Insufficient aggregate spending.
c. It takes time for firms to find new employees.
d. It takes time for people to retrain.
e. Fewer people want to work than before.
B
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You have just noticed that the dollar appreciated and you suspect that U.S. policymakers were behind this change. Which would you choose as the most likely cause of this appreciation in the real exchange rate?
A) An increase in the money supply B) A decrease in the money supply C) A temporary increase in government purchases D) A temporary decrease in taxes
The currency premium in foreign-exchange markets
A) helps to offset anticipated declines in exchange rates. B) helps to offset anticipated increases in exchange rates. C) indicates investors' collective preference for financial instruments denominated in one currency relative to those denominated in another. D) rises as domestic interest rates fall.