What makes the demand for U.S. dollars change?
What will be an ideal response?
Three factors change the demand for U.S. dollars: the world demand for U.S. exports, the interest rate in the United States and other countries, and the expected future exchange rate. If world demand for U.S. exports increases, the demand for U.S. dollars increases. If the interest rate in the United States rises relative to interest rates in other countries, the demand for U.S. dollars increases. And if the expected future exchange rate rises, the demand for U.S. dollars increases.
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If a price ceiling is imposed above the equilibrium price, what is the effect?
a. There is no visible effect on the market outcome. b. A shortage results. c. A surplus results. d. The quantity demanded will decrease.
The relationship between the interest rate and the asset demand for money is
A) positive. B) inverse. C) positive sometimes and inverse other times. D) nonexistent.