All of the following statements are true about the real exchange rate, given by the relation = , EXCEPT
A) a greater change in P (domestic price) compared to a change in (foreign price) necessitates a rise in the nominal rate, , to keep the real rate unchanged.
B) a pegged exchange rate system requires tight control of the money supply.
C) there is a one-to-one correspondence between the real and nominal exchange rates.
D) an expansionary monetary policy raises the real exchange rate.
E) the real exchange rate would be the same as the nominal exchange rate only if the difference between domestic and foreign inflation rates is zero.
C
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The GDP deflator is 100 times the ratio of ________
A) GDP to GNP B) GNP to GDP C) real GDP to nominal GDP D) nominal GDP to real GDP
Holding other things constant, increases in the price level in the US will
a. Cause the dollar to gain value b. Cause the dollar to lose value c. Does not affect the dollar value d. None of the above
The economist Hernando de Soto extensively studied:
a. the problem of scarcity. b. opportunity costs. c. insecure property rights. d. economic freedom in rich countries. e. the sources of comparative advantage in trade.
When Lonnie produces 1 pair of cowboy boots his costs total $300. When he produces 2 pairs of cowboy boots his total costs are $500. This means that Lonnie's marginal cost of producing the second pair of cowboy boots is $200
Indicate whether the statement is true or false