Which of the following best defines the exchange rate?
A. The rate at which one currency can be exchanged for another
B. The rate at which the goods of one country can be exchanged for the goods of another
C. The ratio of the number of units of one currency in circulation to the number of units of another currency in circulation
D. The difference between the inflation rate in one country and the inflation rate in another country
Answer: A
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In the United States, the powers of eminent domain are put forth in the Fifth Amendment to the Constitution
Indicate whether the statement is true or false
In the circular flow diagram, money flows from firms to households through the
a. product market b. payments market c. goods market d. services market e. resource market
During 1979-2005, the mortgage default rate
a. was less than the foreclosure rate. b. soared to more than 5 percent during recessions but declined sharply during economic expansions. c. soared to more than 5 percent during expansions but declined sharply during economic recessions. d. was generally between 1 and 2 percent.
Why do symmetric shocks not disturb fixed exchange rate systems?
A) Symmetric shocks happen only once and cause a one-time shift in interest rates. B) Symmetric shocks imply differences in rates of interest, which is irrelevant to fixed exchange rate systems. C) A demand shock can easily be dealt with using domestic policies that do not involve other nations. D) Symmetric shocks require the same medicine in both economies, so monetary policy will be in a direction to help both situations.