Question 46 If interest rates in the United States rise, the value of the dollar

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Question 46

If interest rates in the United States rise,

the value of the dollar will fall as foreign investors sell their U.S. investments.
the value of the dollar will rise as the foreign investors increase their holdings of U.S. investments.
the value of the dollar will fall as foreign investors increase their holdings of U.S. investments.
the value of the dollar will rise as foreign investors sell their U.S. investments.

Question 30

It would remain at point A.

point B

point C

point D

point E

Question 26

increase income taxes

increase government spending

buy Treasury bills

decrease the discount rate

2 points   

Question 27

According to the short-run Phillips curve, which of the following would result in low rates of unemployment?

weak increases in aggregate supply

a lower inflation rate

weak increases in aggregate demand

a higher inflation rate

It would remain at point A.

point B

point C

point D

point E

Question 26

Figure 16-10Refer to Figure 16-10. In the graph above, suppose the economy in Year 1 is at point A and expected in Year 2 to be at point B. Which of the following policies could the Congress and the president use to move the economy to point C?

increase income taxes

increase government spending

buy Treasury bills

decrease the discount rate

2 points   

Question 27

According to the short-run Phillips curve, which of the following would result in low rates of unemployment?

weak increases in aggregate supply

a lower inflation rate

weak increases in aggregate demand

a higher inflation rate

Explanation / Answer

1. Answer-B- The value of the dollar will rise as the foriegn investors increase their holdings of US Investments.

We know that When the interest rate is higher then investors will speculate that it will decrease in the coming years and they can get huge benefits from the holding of the investments in US.

2. Answer- C-Point C

We know that when fed engaged in expansionary monetory policy, it will creates new bank reserves. it will shift the supply curve.

3.Answer-C- buy treasury bills.

4. Answer- A higher inflation rates

We know that the philips curve is the inverse relationship between inflation and unemployment. So the higher inflation rates means that the lower unemployment will be occured.

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