Domestic economic growth in the united states

Assignment Help Microeconomics

Reference no: EM13689461

1. Assume that there is another boom in the U.S. stock market. As a result we would expect:

a. An increase in foreign savings, a current account surplus, an increase in the supply of dollars and an appreciation of the dollar.

b. A decrease in domestic savings, a capital account deficit as domestic savings moves abroad, an increase in the supply of dollars and an appreciation of the dollar.

c. An increase in foreign savings, a capital account surplus, an increase in the demand for the dollar and an appreciation of the dollar.

d. An increase in foreign savings, a capital account surplus, a decrease in the demand for the dollar and the dollar will depreciate.

2. Assume there is an increase in domestic economic growth in the United States. As a result we would expect:

a. The dollar to depreciate, the prices of imports will fall and export prices will increase. As a result, NX will decrease.

b. No change in the value of the dollar or NX.

c. The dollar to appreciate, the prices of imports will fall and export prices will decrease. As a result, NX will increase.

d. The dollar to depreciate, the prices of imports will increase and export prices will fall. As a result, NX will increase.

3. If there is an increase in domestic economic growth and consumer incomes (holding the inflation rate constant), we can expect:

a. An increase in the supply of dollars in the foreign exchange market and the dollar will appreciate.

b. An increase in the supply of dollars in the foreign exchange market and the dollar will depreciate.

c. A decrease in the supply of dollars in the foreign exchange market and the dollar will appreciate.

d. A decrease in the supply of dollars in the foreign exchange market and the dollar will depreciate.

4. An expansionary monetary policy by the Fed would tend to:

a. Lower the U.S. inflation rate (initially holding exchange rates constant) make exports more expensive, make imports cheaper, and as a result lower the value of the dollar.

b. Lower the U.S. inflation rate, (initially holding exchange rates constant) make exports cheaper, make imports more expensive, and as a result raise the value of the dollar.

c. Raise the U.S. inflation rate, (initially holding exchange rates constant) make exports cheaper, make imports more expensive, and as a result raise the value of the dollar.

d. Raise the U.S. inflation rate (initially holding exchange rates constant) make exports more expensive, make imports cheaper, and as a result lower the value of the dollar.

Reference no: EM13689461

Questions Cloud

Present worth on incremental investment : It is estimated that the annual heat-loss cost in a small power plant is $5,200. Two mutually exclusive proposals have been formulated that will reduce the loss. Proposal A will reduce heat loss by 60% and cost $3,000.

Real wages more accurately reflect the payment to labor : Real wages more accurately reflect the payment to labor because they are adjusted for the effects of inflation. Inflation tends to redistribute real income from lenders to borrowers.

Closed economy-small open economy and large economy : Use algebra to derive (i.e. show how one equation follows from the other), from national income account identities, the simple classical S=I model, using three assumptions: closed economy, small open economy, and large economy.

What is the difference between stocks and bonds : If you were going to invest money, given today's financial market status, where would you invest your money today? What is the difference between stocks and bonds?

Domestic economic growth in the united states : Assume that there is another boom in the U.S. stock market. As a result we would expect: Assume there is an increase in domestic economic growth in the United States. As a result we would expect:

Department of homeland security discovered : Suppose that a study conducted by the Department of Homeland Security discovered that the average time it took passengers to go through the customs process for international flights arriving at the Atlanta airport was 33 minutes.

Why competitive-profit-maximizing firms hire labor : Normal 0 false false false EN-US X-NONE X-NONE Explain briefly why competi..

Potential costs and benefits of a fixed exchange rate regime : Normal 0 false false false EN-US X-NONE X-NONE Many countries experiencing..

User Account

All Pages