The exchange rate can be very volatile, yet the quantity of dollars traded might not change much because
A) the Fed is constantly intervening by buying and selling dollars.
B) there is only limited quantity of dollars in the foreign exchange market.
C) supply of dollars and the demand for dollars often change in opposite directions.
D) supply of dollars and the demand for dollars often change in the same directions.
E) both the demand curve for dollars and the supply curve of dollars are horizontal.
C
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Over the past few decades, nominal interest rates have been higher than real rates of interest. This means that
a. lenders must have expected inflation. b. borrowers must have expected deflation. c. lenders must have expected prices to fall. d. borrowers must have expected prices to fall.
Which of the following is a disadvantage of government provision of a public good?
a. The government lacks information about what people are willing to pay for the good. b. The government does not provide enough of any public good. c. The private sector can provide all public goods at a lower cost. d. None of the above is a disadvantage.