If the U.S. raised its tariff on tires, then at the original exchange rate there would be a
a. surplus in the market for foreign-currency exchange, so the real exchange rate would appreciate.
b. surplus in the market for foreign-currency exchange, so the real exchange rate would depreciate.
c. shortage in the market for foreign-currency exchange, so the real exchange rate would appreciate.
d. shortage in the market for foreign-currency exchange, so the real exchange rate would depreciate.
c
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Which of the following is NOT a reason for the inability to stabilize output?
A) lags between observation and action B) policy actions can immediately take effect C) policy constraints D) preference to maintain long-range goals
The sign of the cross-price elasticity tells us whether two commodities are complements or substitutes, but the size of this elasticity measure tells us
a. how the supply side of the market reacts to changes in demand b. whether the government should regulate the two markets c. which technology producers use d. how closely the two goods are related e. whether or not excess profits can be made in either market