An increase in the U.S. GDP will result in
A. an increase in exports of the United States.
B. an increase in imports of the United States.
C. an increase in the dollar exchange rate and a decrease in imports of the United States.
D. an increase in the dollar exchange rate and a rise in imports of the United States.
Ans: B. an increase in imports of the United States.
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Foreign investment is considered direct only when
a. the foreign firm owns what is considered a controlling interest b. the foreign firm owns at least 50.1 percent of the company c. all foreign stockholders together own at least forty percent of the company d. the foreign firm has control of key patents e. none of the above
Suppose the United States' production possibility frontier was flatter to the widget axis, whereas Germany's was flatter to the butter axis. We now learn that the German mark sharply depreciates against the U.S. dollar. We now know that
A) the United States has no comparative advantage B) Germany has a comparative advantage in butter. C) the United States has a comparative advantage in butter. D) Germany has a comparative advantage in widgets. E) Germany has lost its comparative advantage.