In the foreign exchange market, how will each of the following influences affect the demand for dollars and the demand curve for dollars?
a. an increase in the exchange rate
b. an increase in the U.S. interest rate
c. a fall in the expected future exchange rate
a. The increase in the exchange rate decreases the quantity of dollars demanded and creates an upward movement along the demand curve for dollars.
b. An increase in the U.S. interest rate increases the demand for dollars and shifts the demand curve for dollars rightward.
c. A fall in the expected future exchange rate decreases the demand for dollars and shifts the demand curve for dollars leftward.
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Which of the following situations is least likely to involve strategic interaction?
A) two countries deciding whether to impose trade restrictions on each other B) competing convenience stores deciding how much to charge for coffee C) two customers deciding which toaster to buy from Target D) a state legislature deciding whether to legalize casino gambling
Suppose the United States has a Gini coefficient of 0.4 and Sweden has a Gini coefficient of 0.25. Which of the following statements is true?
A) Income distribution is changing faster in the United States. B) The distribution of income is more equal in the United States. C) Without information on population, it is not possible to compare income distribution between countries. D) The distribution of income is more equal in the Sweden.