The exchange rate can be very volatile, yet the quantity of dollars traded might not change much because
A) the Fed is constantly intervening by buying and selling dollars.
B) there is only limited quantity of dollars in the foreign exchange market.
C) supply of dollars and the demand for dollars often change in opposite directions.
D) supply of dollars and the demand for dollars often change in the same directions.
E) both the demand curve for dollars and the supply curve of dollars are horizontal.
Question 2
If investment increases by 100, then the aggregate expenditure model concludes that equilibrium expenditure
A) increases by 100.
B) increases by less than 100.
C) decreases by 100.
D) remains unchanged.
E) increases by more than 100.
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