A variety of economic factors can contribute to depreciating the U.S. dollar. These include monetary policy, rising prices or inflation, demand for currency, economic growth, and export prices .
Which of the following would be most likely to occur if the United States placed high tariffs on imported goods?
10. Which of the following would be most likely to occur if the United States placed high tariffs on imported goods? Explanation: High tariffs would protect less efficient domestic producers from foreign competition .
Which of the following would cause the United States dollar to increase in value compared to the Japanese yen?
Which of the following would cause the United States dollar to increase in value compared to the Japanese yen? With an increase in investment demand in the United States, the real interest rate rises .
Which of the following would will cause an increase in the equilibrium real interest rate?
The equilibrium real interest rate will be higher and explains that this is because increased government spending financed by borrowing will increase the demand for loanable funds .
When the United States dollar appreciates against the euro which of the following will most likely happen?
When the United States dollar appreciates against the euro, which of the following will most likely happen? European firms will pay fewer euros for equipment purchased from the United States. European products will become more expensive for United States consumers.
Which of the following would cause the U.S. dollar to appreciate relative to the Canadian dollar?
Which of the following would cause the U.S. dollar to depreciate relative to the Canadian dollar? Lower interest rates in the United States relative to Canada .
Who determines a fixed exchange rate?
A fixed or pegged rate is determined by the government through its central bank . The rate is set against another major world currency (such as the U.S. dollar, euro, or yen). To maintain its exchange rate, the government will buy and sell its own currency against the currency to which it is pegged.
Who benefits from a tariff?
Tariffs mainly benefit the importing countries , as they are the ones setting the policy and receiving the money. The primary benefit is that tariffs produce revenue on goods and services brought into the country. Tariffs can also serve as an opening point for negotiations between two countries.
What is true if the economy is producing at the full employment level of output?
When an economy is producing exactly its full employment output, the rate of unemployment is equal to the natural rate of unemployment . The LRAS curve is also vertical at the full-employment level of output because this is the amount that would be produced once prices are fully able to adjust.
How do tariffs on US goods benefit US consumers quizlet?
What are the effects of a tariff? Tariffs bring about higher prices and revenues to domestic producers and lower sales and revenues to foreign producers . Tariffs lead to higher prices and reduce consumer surplus for domestic consumers.
What is the nominal interest rate if expected inflation is 0 %?
Like expected inflation, expected deflation affects the nominal interest rate. Consider Figure 29.6 from Section 5 (repeated here as Figure 34.6), which demonstrates how expected inflation affects the equilibrium interest rate. As shown, the equilibrium nominal interest rate is 4% if the expected inflation rate is 0%.
Which of the following would indicate that economic growth has occurred quizlet?
Which of the following would indicate that economic growth has occurred? The long run aggregate supply curve shifts to the right. a decrease in aggregate supply . Increase in which of the following is most likely to increase employment and promote long run economic growth?
Which of the following is most likely to lead to higher economic growth?
Which of the following is most likely to lead to higher economic growth? High levels of infrastructure development .
What will happen if maxistan opens its economy to trade with other countries?
Key Terms. a tax on imported goods; if Maxistan places a tariff on goods from other countries, it will supply less of its own currency because it will want to buy fewer foreign goods.
What is the result of an increase in the money supply?
An increase in the supply of money typically lowers interest rates , which in turn, generates more investment and puts more money in the hands of consumers, thereby stimulating spending. Businesses respond by ordering more raw materials and increasing production.
When the international value of the dollar decreases?
When the international value of the dollar decreases, Americans pay less for foreign goods . the U.S. trade deficit increases. U.S. imports decrease. Americans would demand more foreign currency.
