The actual exchange rate of the real, Brazil's currency, is 2.50 real per U.S. dollar. According to the latest PPP estimations, the real is undervalued by 40 percent. This implies that the PPP exchange rate is:
A. 1.40 real per dollar.
B. 1.20 real per dollar.
C. 1.50 real per dollar.
D. 2.00 real per dollar.
Answer: C
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In the above figure, the deadweight loss is zero if output is
A) 0 units. B) 10 units. C) 20 units. D) 30 units.
The relationship between the marginal product of labor (MP), the product price (P) and the marginal revenue product of labor (MRP) in a perfectly competitive market is
a. MP = P x MRP b. MP = P + MRP c. MRP = P / MP d. MRP = P x MP e. MRP = P + MP
Eliminating all farm price floors would
a. raise farmers' profit b. increase the MRP of farms c. raise the price of farm goods d. create an excess demand for farm goods e. lower farm property values
Identify the "oversimplified multiplier formula."
a. Multiplier = 1 divided by (1 ? change in GDP) b. Multiplier = 1 divided by (1 ? marginal propensity to consume) c. Multiplier = 1 divided by (1 ? marginal propensity to save) d. Multiplier = 1 divided by (1 ? rate of inflation)