If the number of Japanese yen a dollar buys falls, but neither country's price level changes, then the real exchange rate
a. depreciates which causes U.S. net exports to increase.
b. depreciates which causes U.S. net exports to decrease.
c. appreciates which causes U.S. net exports to increase.
d. appreciates, which causes U.S. net exports to decrease.
a
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In order to maintain an effective fixed exchange rate that differs from the market rate, the government must have
a. arbitrage capability b. a surplus of merchandise exports c. the ability to persuade other governments to control their exports d. sufficient foreign exchange reserves e. the ability to float high interest rates
If tariffs are decreased, the long-run effect is most likely to be
a. a decrease in both U.S. imports and exports.
b. an increase in both U.S. imports and exports.
c. a decrease in U.S. imports and an increase in U.S. exports.
d. an increase in U.S. imports and a decrease in U.S. exports