Goods that cost one dollar in the U.S. cost one euro in France, the real exchange rate would be computed as how many French goods per U.S. goods?
a. one
b. the price of the U.S. goods
c. the number of euros that can be bought with one U.S. dollar
d. None of the above is correct.
c
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Other things being equal, a decrease in an economy's exports will
A. decrease domestic aggregate expenditures and the equilibrium level of GDP. B. increase domestic aggregate expenditures and the equilibrium level of GDP. C. increase the amount of imports consumed by the private sector. D. have no effect on domestic GDP because imports will offset the change in exports.
Goods with small substitution effects tend to be normal goods.
Answer the following statement true (T) or false (F)
What are Pigouvian taxes and subsidies? How do governments decide when to levy a tax or provide a subsidy?
What will be an ideal response?
Because borrowers, once they have a loan, are more likely to invest in high-risk investment projects, banks face the
A) adverse selection problem. B) lemon problem. C) adverse credit risk problem. D) moral hazard problem.