Are exchange rates and unemployment rates related? How?
What will be an ideal response?
Yes, exchange rates and unemployment rates are related. This is because if a currency appreciates, there is a decreased demand for its products worldwide. Due to this decrease in demand for its products, there is a decrease in labor demand. This causes unemployment. Conversely, if a currency appreciates, it will cause a reduction in unemployment.
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Air fares are generally lower on Tuesdays and Wednesdays each week. What is a likely explanation for this occurrence?
A. Supply is relatively variable, and lower demand on these days leads to a lower equilibrium price. B. Demand is relatively variable, and lower supply leads to a lower equilibrium price. C. Lower levels of both supply and demand on these days lead to a lower equilibrium price. D. Supply is relatively fixed, and lower demand on these days leads to a lower equilibrium price. E. Demand is relatively fixed, and lower supply leads to a lower equilibrium price.
What is the difference between willingness to accept and willingness to pay? For a trade to take place, does the willingness to accept have to be lower, higher, or equal to the willingness to pay?
What will be an ideal response?
The purpose of a financial sector is ________
A) to minimize the payments firms make to state and local governments B) to maximize the payments firms make to state and local governments C) to channel funds away from households and firms with surplus funds D) to channel monies into socially acceptable causes
Which one of the following is TRUE?
A. The real rate of interest is the nominal rate plus the anticipated rate of inflation. B. Increases in anticipated inflation increase the real interest rate. C. The nominal rate of interest is the real rate plus the anticipated rate of inflation. D. Increases in the CPI increase the real interest rate.