In the foreign exchange market, an increase in the exchange rate leads to
A) an increase in the quantity of dollars demanded and no movement along the demand curve for dollars.
B) an increase the quantity of dollars supplied and a movement along the supply curve of dollars.
C) an increase the quantity of dollars supplied and no movement along the supply curve of dollars.
D) a decrease the quantity of dollars supplied and a movement along the supply curve of dollars.
E) an increase in the quantity of dollars demanded and a movement along the demand curve for dollars.
Question 2
If real GDP exceeds potential GDP, then the unemployment rate ________ the natural unemployment rate.
A) is greater than
B) equals
C) is less than
D) The premise of the question is incorrect because the relationship between real GDP and potential GDP has nothing to do with the relationship between the unemployment rate and the natural unemployment rate.
E) The premise of the question is incorrect because real GDP can never exceed potential GDP.
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