When the price level in France increases while the exchange rate and the price level in the United States remain the same, the result is
A) U.S.-made goods become relatively cheaper compared to French-made goods.
B) French citizens are more likely to buy U.S.-made goods.
C) U.S. citizens are less likely to buy French-made goods.
D) All of the above answers are correct.
Question 2
Which of the following is a liability on the balance sheet of the Federal Reserve System?
A) currency
B) U.S. government securities
C) mortgage-backed securities
D) None of the above are correct because they are all assets of the Federal Reserve.
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