Author Question: A person holding dollar deposits during the devaluation of the dollar would A) enjoy a monetary ... (Read 123 times)

jjjetplane · **on:** Jun 30, 2018

A person holding dollar deposits during the devaluation of the dollar would

A) enjoy a monetary gain.
B) see the foreign currency value of dollar assets increase by the amount of the exchange rate change.
C) shift their wealth into domestic investments.
D) suffer a monetary loss and see the foreign currency value of dollar assets decrease by the amount of the exchange rate change.
E) see no change in their investments.

Question 2

If the price of the capital intensive product rises more than does the price of the land intensive product, then

A) the relative price of the capital intensive product will fall to some point between the pretrade relative prices.
B) demand will shift away from the capital-intensive product, and its production will decrease.
C) demand will shift away from the capital-intensive product, and its production will decrease relative to that of the land intensive product.
D) the production of the capital-intensive product will decrease, but by less than production of the land-intensive product.
E) the country that exports the capital-intensive good will lose its comparative advantage.