If the value of the U.S. dollar appreciates in foreign exchange markets then this will likely cause
a. the relative price of American exports to rise for foreigners interested in buying U.S. exports.
b. the relative price of American imports to fall for Americans interested in buying U.S. imports.
c. U.S. exports to fall and U.S. imports to rise creating a balance of trade deficit.
d. All of the above.
d. All of the above.
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According to the Taylor rule ________
A) expectations are formed in an adaptive fashion B) the central bank should set its federal funds rate target by a formula that puts weight on both output and inflation gaps C) a constant growth rate rule for money should be adopted D) expectations should be formed consistent with the model of rational expectations
Which of the following is correct if the interest rate is 6 percent?
a. $215 to be received a year from today has a present value of over $200; $420 a year from now has a present value over $400. b. $215 to be received a year from today has a present value of over $200; $420 a year from now has a present value under $400. c. $215 to be received a year from today has a present value of under $200; $420 a year from now has a present value over $400. d. $215 to be received a year from today has a present value of under $200; $420 a year from now has a present value under $400.