By how much does the real, bilateral exchange rate change when the nominal, bilateral exchange rate changes from $1.40/£ to $1.60/£, the U.S. tradable basket from $2,100 to $2,200 and the British tradable basket from £1,500 to £1,600?
a. The real exchange rate rises by 12.5%.
b. The real exchange rate rises by 16.35%.
c. The real exchange rate rises by 3.1%
d. The real exchange rate falls by 3.1%
e. The real exchange rate falls by 12.5%
.B
You might also like to view...
The "secondary credit" of the discount rate is usually lower than the "primary credit," because it is intended for banks in good financial condition
a. True b. False Indicate whether the statement is true or false
Changes in the expected rate of inflation will:
A. cause the SRAS curve to become vertical. B. cause the SRAS curve to become upward-sloping. C. shift the SRAS curve downward or upward. D. not shift but create a movement along the SRAS curve.
Answer the following questions true (T) or false (F)
1. If the Fed wishes to decrease the supply of money and credit, it may sell government securities, raise the discount rate, or lower required reserve ratios. 2. The Fed was founded in 1913 to serve as lender of last resort to bankers during bank runs and panics. 3. If the rate of growth in real GDP exceeds the rate of growth in the money supply, the quantity theory of money predicts a price deflation.
Which of the following is true of the 2008 Troubled Asset Relief Program?
A) It was a contractionary fiscal policy. B) It was a contractionary monetary policy. C) It was a mix of monetary and fiscal policies. D) It mainly aimed at reducing inflation.