All Else Equal, If the Exchange Rate of the Dollar

question 29

Multiple Choice

All else equal, if the exchange rate of the dollar against the euro increases,

• A)German goods will be less expensive to U.S.residents.
• B)U.S.residents will purchase fewer German imports
• C)the quantity of euros supplied will increase.
• D)German residents will increase their purchases of U.S.goods.
• E)inflation in the U.S.will increase.

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Definitions:

Labor Force

The total number of people employed or actively seeking employment in a country or region.

Natural Rate

Often refers to the natural rate of unemployment where the economy is in equilibrium, or the long-term interest rate unaffected by short-term fluctuations.

Unemployment

A situation where individuals who are capable of working and willing to work at current wage rates cannot find employment.

Unemployment Rate

The extent of unemployment in the labor force, represented by those actively seeking employment.