Suppose the real exchange rate is 3/4 gallon of country A's gasoline per gallon of U.S. gasoline, a gallon of U.S. gasoline costs $3.00 U.S., and a gallon of gas in country A costs 6 units of their currency. What is the nominal exchange rate?
a. 3/8 of a unit of country A's currency per dollar.
b. 3/2 units of country A's currency per dollar.
c. 8/3 units of country A's currency per dollar.
d. None of the above is correct.
b
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If the incentive to take advantage of a conflict of interest is high
A) removing the economies of scope that created the conflict may induce higher costs because of the decrease in the flow of reliable information. B) then the government must step in to remove the conflict. C) the costs of non-action in removing the conflict will always be higher than the cost of removing the conflict. D) firms will always step in and work to remove the conflict.
Which of the following is TRUE about producers' willingness to offer warranties on products?
A) Producers are equally likely to offer warranties on high-quality and low-quality goods. B) Producers are more likely to offer warranties on low-quality goods, because without the signal that the warranty provides, the low-quality good wouldn't sell. C) Producers are more likely to offer warranties on high-quality goods, because the expected cost of repairs is lower for those goods. D) Producers have an incentive to deal with third-party companies to provide the warranties, so that an "impartial" view of the product is given to the consumer. E) Producers will not offer warranties in any market that suffers from asymmetric information.
Many economists refer to the Keynesian analysis as the “Keynesian revolution.” How was Keynesian analysis “revolutionary” in comparison to the classical doctrine?
What will be an ideal response?
Some economists argue that increases in government spending are not a likely source of continued inflation because
A) increases in government spending cause reductions in other spending components. B) government spending is not created by the Fed. C) increases in government spending can be financed by money creation. D) a and b E) a and c