Refer to the given diagram, where S d and D d are the domestic supply and demand for a product and P c is the world price of that product. If this economy was entirely closed to international trade, equilibrium price and quantity would be:
A. P a and z.
B. P a and x.
C. P c and z.
D. P c and v.
B. P a and x.
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Assume the nominal dollar-per-euro ($/€) exchange rate appreciates by 2%, U.S. prices rise by 5% and Euro-Area prices rise by 3%. By approximately how much does the real exchange rate change?
a. 3% b. There is no change. c. 4% d. 5% e. 6%
Which of the following statements best represents economists' beliefs about the bias in the CPI as a measure of the cost of living?
a. Economists agree that the bias in the CPI is a very serious problem. b. Economists agree that the bias in the CPI is not a serious problem. c. Economists agree on the severity of the CPI bias, but there is still debate on what to do about it. d. There is still debate among economists on the severity of the CPI bias and what to do about it.
The Federal Deposit Insurance Corporation:
A. has eliminated bank failures. B. insures all demand deposits without limit. C. insures all demand deposits up to $100,000. D. includes commercial banks and state-chartered banks as its members.
Use the information in the following table to answer the next question.Money SupplyMoney DemandInterest RateInvestment (at interest rate shown)$400$6002%$7004005003600400400450040030053004002006200The equilibrium interest rate in this economy is ________.
A. 3% B. 4% C. 5% D. 6%