The elasticity of savings with respect to interest rates is the percentage change in the quantity of savings divided by the percentage change in interest rates.
Select whether the statement is true or false.
A. True
B. False
A. True
This statement is true. The elasticity of savings with respect to interest rates is the percentage change in the quantity of savings divided by the percentage change in interest rates.
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If the U.S. inflation rate falls relative to the Mexican inflation rate, which of the following will happen in the market for pesos?
a. A rightward shift of the demand curve, a leftward shift of the supply curve, and an appreciation of the peso b. A leftward shift of the demand curve, a rightward shift of the supply curve, and an appreciation of the peso c. A leftward shift of the demand curve, a leftward shift of the supply curve, and a depreciation of the peso d. A rightward shift of the demand curve, a rightward shift of the supply curve, and an appreciation of the peso e. A leftward shift of the demand curve, a rightward shift of the supply curve, and a depreciation of the peso.
When the Fed unexpectedly decreases the money supply,
a. real interest rates will rise and the foreign exchange value of the dollar will appreciate. b. real interest rates will rise and the foreign exchange value of the dollar will depreciate. c. real interest rates will fall and the foreign exchange value of the dollar will appreciate. d. real interest rates will fall and the foreign exchange value of the dollar will depreciate.