Exhibit 15-7 Foreign exchange market for U.S. dollars and British pounds
Which of the following could cause the dollar-pound exchange rates to change as shown in Exhibit 15-7?
A. American goods become more popular in Great Britain.
B. British incomes rise, while U.S. incomes remain unchanged.
C. The U.S. price level rises, while the British price level remains unchanged.
D. The U.S. real interest rate rises, while the British real interest rate remains unchanged.
Answer: C
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A minimum wage set above the equilibrium wage
A) decreases the deadweight loss in the market. B) decreases the workers' surplus because workers must spend resources looking for jobs. C) increases the firm's surplus. D) increases the market's efficiency. E) has no effect on the market.
The United States is the most inequitable country in the developed world
Indicate whether the statement is true or false
Why does the elasticity of demand for a commodity change over time?
When a U.S. citizen invests in foreign assets, the transaction is recorded in the balance of payments as a
a. credit in financial account. b. debit in the financial account. c. credit in the current account. d. debit in the current account.