In the open-economy macroeconomic model from the book, the quantity of dollars d

ID: 1248170 • Letter: I

Question

In the open-economy macroeconomic model from the book, the quantity of dollars demanded in the market for foreign-currency exchange

A. and the quantity of dollars supplied in the market for foreign-currency exchange depend on the real exchange rate.
B. depends on the real exchange rate. The quantity of dollars supplied in the foreign-exchange market depends on the real interest rate.
C. and the quantity of dollars supplied in the market for foreign-currency exchange depend on the real interest rate.
D. depends on the real interest rate. The quantity of dollars supplied in the foreign-exchange market depends on the real exchange

Explanation / Answer

OPTION A In the open-economy macroeconomic model from the book, the quantity of dollars demanded in the market for foreign-currency exchange and the quantity of dollars supplied in the market for foreign-currency exchange depend on the real exchange rate.

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In the open-economy macroeconomic model from the book, the quantity of dollars d

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