Given the U.S. price level P, the foreign country price level P*, and the real exchange rate RER in foreign currency per U.S. dollar, the nominal exchange rate E would be given by
A) E = RER × (P/P*).
B) E = RER × (P*/P).
C) E = (P/P*) / RER.
D) E = P × (RER/P*).
B
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To reach the maximum money multiplier, it is assumed that
A) there is insufficient loan demand. B) all loans get redeposited in a checkable account. C) loans are diverted into circulating currency. D) commercial banks keep the amount of reserves. equal to total bank deposits.
The figure above shows a monopoly firm's demand curve. The monopoly's total revenue is zero at point
A) x. B) r. C) t. D) u.
In the above figure, if the price is $4 per unit, how many units will a profit maximizing perfectly competitive firm produce?
A) 0 B) 5 C) 20 D) 30
If labor is 80 percent of total costs in industry A and 20 percent in industry B, then other things equal, we would expect the elasticity of demand for labor to be
A) greater in industry A than in industry B. B) greater in industry B than in industry A. C) the same in both industries. D) uncertain since no general relationship exists between cost shares and elasticities.