If purchasing-power parity holds, the price level in the U.S. is 250, and the price level in Japan is 260, which of the following is true?
a. the real exchange rate is 250/260
b. the real exchange rate is 260/250
c. the nominal exchange rate is 250/260
d. the nominal exchange rate is 260/250
d
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Smith' s construction of an 8-foot fence around his property will block his neighbor Johnson's scenic view. If Smith constructed a 6-foot fence, Johnson's view would not be blocked. If Johnson values his view at $1,000 and Smith values the extra 2 feet of fence at $500, then a possible resolution is that
a. Johnson makes a side payment to Smith of $750 not to build the fence so high. b. Johnson makes a side payment to Smith of less than $500 not to build the fence so high. c. Smith makes a side payment of $750 to Johnson to live with the fence. d. Smith makes a side payment of over $1000 to Johnson to live with the fence.
Suppose that nuclear power plants are banned. What are examples of the opportunity costs of this decision?
What will be an ideal response?
International financial freedom
A. helps all citizens in both poor and wealthy countries. B. hurts wealthy countries. C. maximizes world product. D. hurts poor countries.
Transaction costs can be defined as the costs:
A. the government must pay to allow for an exchange. B. incurred by buyer and seller in agreeing to and executing a sale of goods or services. C. the government incur to create a structured market for the exchange of buyers and sellers. D. incurred by the buyer and seller in agreeing to and executing a purchase of goods or services, excluding transportation costs.