Consider an identical basket of goods in both the U.S. and Taiwan. For a given nominal exchange rate, in which case is it certain that the U.S. real exchange rate with Taiwan falls?
a. the price of the basket of goods rises in the U.S. and Taiwan.
b. the price of the basket of goods rises in the U.S. and falls in Taiwan.
c. the price of the basket of goods falls in the U.S. and rises in Taiwan.
d. the price of the basket of goods falls in both the U.S. and Taiwan.
c
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In the specific factors model, which of the following will increase the quantity of labor used in food production?
A) an increase in the price of food relative to that of cloth B) an increase in the price of cloth relative to that of food C) a decrease in the price of labor D) an equal percentage decrease in the price of food and cloth E) an equal percentage increase in the price of food and cloth
In the Keynesian model, interest rates are determined by
A) aggregate demand and aggregate supply. B) saving and investment. C) the demand for and supply of money. D) the velocity of money.
In the long run, a monopolistic competitor will produce to the point at which
A) average total costs are at the minimum of possible ATC. B) average total costs are higher than the minimum of possible ATC. C) resources are used at the lowest possible cost. D) at the lowest possible price.
If firms in a monopolistically competitive industry are operating with positive economic profit, over time we would see
A. firms alter their advertising rates until they made at least normal profits. B. some firms entering the industry, causing the demand curves of the existing firms to shift to the left. C. some firms entering the industry, causing the market supply curve to shift to the right, lowering price. D. some firms entering the industry, causing the demand curves of the existing firms to shift to the right.