Author Question: If the exchange rate is defined as the price of the foreign currency in terms of the domestic ... (Read 81 times)

mp14 · **on:** Jun 30, 2018

If the exchange rate is defined as the price of the foreign currency in terms of the domestic currency, an increase in the exchange rate:
a. increases domestic demand for foreign goods.
b. makes domestic goods cheaper in the foreign markets.
c. lowers net exports.
d. lowers aggregate expenditure on domestic goods.
e. increases the domestic country's external debt burden.

Question 2

Economists believe that most individuals act as if they are motivated by self-interest and:
a. respond selfishly.
b. respond in predictable ways to changing circumstances.
c. it leads to inconsistent and unpredictable behavior.
d. all of the above.