Suppose 60% of U.S. trade is with England and the rest is with Japan. If the dollar rises by 20% against the pound but falls by 20% against the yen, what is the percentage change in the effective exchange rate of the United States?
a. -12%
b. -4%
c. ±0%
d. -8%
Ans: b. -4%
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Trade is often restricted because the
A) gain per producer is larger than the loss per consumer. B) total gain to all producers is larger than the total loss to all consumers. C) gain per producer is less than the loss per consumer. D) total gain to all producers is smaller than the total loss to all consumers. E) gain per consumer is larger than the loss per producer.
The manager of a perfectly competitive firm has to decide:
A) the quantity of output the firm should produce. B) the price the firm should charge for its output. C) the quantity of output the firm should produce and the price it should charge. D) neither the quantity of output the firm should produce nor the price it should charge because the market makes both of these decisions.
If additional units of output could be produced at constant opportunity cost, the production possibilities curve would be: a. bowed inward toward the origin
b. bowed outward away from the origin. c. positively sloped. d. a straight line with a negative slope.
An important difference between a perfectly competitive market and a monopolistically competitive market is that, in the latter,
a. there are more sellers of the good b. there are only a few large sellers c. there are no barriers to entry or exit d. there is only one seller of the good e. the product is not standardized