An exchange rate of $1 = 0.89 euro means that:
a) it takes 89 euros to buy $1.
b) 1 euro will buy $0.89.
c) $1 can buy 0.89 euros.
d) $0.89 exchanges for 1 euro.
Ans: c) $1 can buy 0.89 euros.
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Answer the following statements true (T) or false (F)
1. A nation needs an abundance of all productive resources in order to attain a high standard of living. 2. If a society is producing at a point on its production possibilities curve, it does not have the problem of scarce resources. 3. The process of specialization can be carried out by business firms as well as by regions and nations. 4. The extent to which a society can engage in specialization and exchange is limited by the size of the market.
Refer to the above figure. Regulators cannot force natural monopolies to operate in the long run at a loss. Therefore, they usually require the firms to charge a price equal to
A) marginal cost, which is P1. B) marginal cost, which is P2. C) average cost, which is P3. D) average cost, which is P4.
Which of the following is not an example of a flow variable?
a. The amount of income that a person earns each month b. The amount of interest that a savings account earns each week c. The amount of money in a savings account d. The amount of taxes that a person pays each year e. All of these are flow variables
An increase in capital inflows will
A) increase the equilibrium exchange rate. B) increase net foreign investment. C) increase capital outflows. D) decrease capital outflows.