For a given domestic and foreign price level, an increase in the nominal exchange rate ________ the real exchange rate.
A. may either increase or decrease
B. increases
C. decreases
D. offsets any change in
Answer: B
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Your U.S.-based company is selling parts to a company in Bangladesh. If you require payment in US$
A) the Bangladeshi company bears the exchange rate risk. B) your company bears the exchange rate risk. C) the companies share in the exchange rate risk. D) there is no exchange rate risk.
A modern example of privatizing a common resource is:
A. patents. B. quotas. C. taxes. D. subsidies.
If a 10 percent increase in income induced a group of consumers to reduce their yearly purchases of eggs by 5 percent, for these consumers,
a. the income elasticity of eggs equals approximately 1.05. b. the income elasticity of eggs is 0.5. c. eggs are a luxury good. d. eggs are an inferior good.
A major difference between a monopolist and a perfectly competitive firm is that
A) the monopolist is certain to earn economic profits. B) the monopolist's marginal revenue curve lies below its demand curve. C) the monopolist engages in marginal cost pricing. D) the monopolist charges the highest possible price that he can.