Identify changes in two variables that would shift the supply curve of dollars to the right. Identify changes in two variables that would shift the demand curve for dollars to the right
What will be an ideal response?
An increase in U.S. output or an increase in the foreign real interest rate will cause the supply curve for dollars to shift to the right. A rightward shift in the supply curve causes the exchange rate to depreciate in a flexible exchange-rate system.
An increase in foreign output or an increase in the U.S. real interest rate will cause the demand curve for dollars to shift to the right. A rightward shift in the demand curve causes the exchange rate to appreciate in a flexible exchange-rate system.
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Which of the following always raises the equilibrium price?
A) an increase in both demand and supply B) a decrease in both demand and supply C) an increase in demand combined with a decrease in supply D) a decrease in demand combined with an increase in supply
If there is an inflationary gap in the economy, discretionary fiscal policy would likely involve an action to
A) shift the aggregate demand curve to the right. B) shift the aggregate demand curve to the left. C) shift both the aggregate demand curve and aggregate supply curve to the right. D) shift both the aggregate demand curve and aggregate supply curve to the left.