If the exchange rate is 60 Indian rupees per dollar and a bushel of rice costs 200 rupees in India and $3 in the U.S., then the real exchange rate is
a. greater than one and arbitrageurs could profit by buying rice in the U.S. and selling it in India.
b. greater than one and arbitrageurs could profit by buying rice in India and selling it in the U.S..
c. less than one and arbitrageurs could profit by buying rice in the U.S. and selling it in India.
d. less than one and arbitrageurs could profit by buying rice in India and selling it in the U.S..
c
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A family's summer house on Cape Cod pays a return in the form of
A) interest rate. B) capital gains. C) the pleasure of vacations at the beach. D) stock options. E) capital gains and pleasure.
Suppose two economies, the United States and Saudi Arabia, each have a GDP of $1,000 . A U.S. war effort involves the purchase of $100 of Saudi oil, which is financed by selling $100 worth of U.S. government bonds to Saudi Arabia. During the war period,
a. U.S. civilian and war consumption stays at $1,000 while Saudi consumption falls to $900 b. U.S. civilian and war consumption increases to $1,100 while Saudi consumption stays at $1,000 c. U.S. civilian and war consumption increases to $1,100 while Saudi consumption falls to $900 d. U.S. civilian and war consumption stays at $1,000 and Saudi consumption stays at $1,000 e. U.S. civilian and war consumption stays at $1,000 while Saudi consumption rises to $1,100
A movement along a demand curve from one price-quantity combination to another is called a:
A. change in quantity demanded. B. change in demand. C. shift in the demand curve. D. change in quantity supplied.
Which is the distinguishing feature of the standard cobweb model?
A. Real wages steadily increase. B. Capital is not fixed in the short run. C. Payroll taxes create a tax wedge, which in turn increases overall employment levels. D. The firm is a perfectly discriminating monopsonist. E. Wages and employment levels adjust slowly over time.