According to purchasing-power parity, if over the course of a year the price level in the U.S. rises more than in Japan, then which of the following falls?
a. the U.S. real exchange rate, but not the U.S. nominal exchange rate
b. the U.S. nominal exchange rate, but not the U.S. real exchange rate
c. the U.S. nominal exchange rate and the U.S. real exchange rate
d. neither the real exchange rate nor the nominal exchange rate
b
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Cartel agreements are difficult to sustain because:
A. cartel members do not face the economic incentives inherent in a prisoner's dilemma. B. it's a dominant strategy for each cartel member to cheat on the cartel agreement. C. the collective payoff to all the cartel members is lower when they all abide by the cartel agreement. D. it's usually easy to discover if one of the members has cheated.
Your friend does not understand the benefits of globalization. Outline for your friend the positive economic aspects of globalization
What will be an ideal response?
The federal budget deficit and the trade balance are often referred to as the
A) twin deficits. B) dueling depreciators. C) balance of payments. D) national debt.
Social Security payments:
A. continue to cause the elderly to lose income over time, since payments are not adjusted for inflation. B. cause concern for retirees, due to the increase in life expectancies. C. hold their real value because they are adjusted for inflation. D. are the biggest drain on the retirees budget each year.