In foreign exchange markets, who demands dollars and who supplies dollars?
What will be an ideal response?
Foreign residents buying U.S. goods, services, or assets demand dollars and U.S. residents buying foreign goods, services, or assets supply dollars. In foreign exchange markets, the supply of dollars is a demand for foreign currency and the supply of a foreign currency is a demand for dollars.
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Suppose that a good that was formerly an import becomes an export, perhaps after an import substitution and export promotion strategy. How is this change reflected in the production possibility frontier?
What will be an ideal response?
An individual consumes only two goods, X and Y. Which of the following expressions represents the utility maximizing market basket?
A) MRSxy is at a maximum. B) Px/Py = money income. C) MRSxy = money income. D) MRSxy = Px/Py. E) all of the above