Suppose that the exchange rate between British pounds and U.S. dollars is originally $2.50 per pound. If it then changes to $3 for 1 pound, exports of U.S. goods to Britain will tend to:
a. rise

When a country allows trade and becomes an importer of a good,

a. domestic producers become better off, and domestic consumers become worse off. b. domestic producers become worse off, and domestic consumers become better off. c. domestic consumers become better off, but the effect on the well-being of domestic producers is ambiguous. d. domestic producers become worse off, but the effect on the well-being of domestic consumers is ambiguous.

If expectations are rational,

A. a predictable change in inflation can make the expected inflation rate deviate from the actual rate. B. unemployment can exceed the full-employment rate even in the long run. C. the difference between the actual inflation rate and the expected inflation rate must be a purely random number. D. the inflation rate cannot be reduced without a period of high unemployment because the Phillips curve is downward sloping.