If the exchange rate between the United States and Portugal changes from $1 = 1 euro to $1 = 2 euros, then holding everything else constant, the price of U.S. goods in Portugal will decrease.

Which of the following statements has usually held TRUE about the relationship between the trade deficits and government budget deficits?

A) There is a negative relationship between trade deficits and budget deficits. B) There is a positive relationship between trade deficits and budget deficits. C) There is no relationship between trade deficits and budget deficits. D) A relationship exists only when there is a balanced budget.

Which of the following is true for a market that clears?

a. An excess supply of anything traded will lead to a fall in its price. b. An excess demand of anything traded will lead to a fall in its price. c. An excess supply of anything traded will lead to a rise in its price. d. An excess demand of anything traded will not lead to a price change. e. A high price will lead to a high demand.