Question 2 (1 point)

Which of the following affects the exchange rate in the short run?

Question 2 options:

	expected relative price level
	expected future exchange rate
	all of the above

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Question 3 (1 point)

If a central bank is following a policy of fixing an interest rate at a constant value, then, if the economy expands, the bank will respond by

Question 3 options:

	shifting the demand for money to the left.
	shifting the supply of money to the left.
	shifting the supply of money to the right.

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Question 5 (1 point)

Which of the following factors affects the exchange rate in the short run but not the long run?

Question 5 options:

	domestic interest rate
	relative expected trade barriers
	relative import demand

Question 6 (1 point)

A central bank would increase interest rates to

Question 6 options:

lower inflation.

raise employment.

stimulate the economy.

Question 7 (1 point)

If the euro/dollar exchange rate is 1.20 euro/dollar, and an American washing machine costs $250, assuming no trade barriers or transportation costs, what is the euro price of the washing machine?

Question 7 options:

	200e
	250e
	none of the above