The average of the bilateral rate changes for a nation, weighted by the importance of the trading partner, is know as
A) the real exchange rate
B) the nominal exchange rate
C) the effective exchange rate
D) the direct exchange rate
Ans: C) the effective exchange rate
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Assume that the reserve ratio is 20% and banks in the system are loaning out all their excess reserve. If people collectively cash out $10 billion from their checking accounts, then the lending ability of the banking system will be
A. increased by $10 billion. B. decreased by $40 billion. C. decreased by $50 billion. D. decreased by $10 billion.
A good way to encourage agricultural production is to
a. encourage farmers to work harder b. subsidize input prices for farmers c. permit farm prices to rise with increasing demand d. create a monopoly firm to buy all farm output e. all of the above
Output per person on a country level is another way to think about:
A. real GDP per capita. B. nominal GDP. C. productivity. D. GDP growth rates.
Say Anna's utility function was given by UA = (MA) (MM), where MA is Anna's wealth and MM is Marie's wealth. Initially, Anna has 160 units of wealth and Marie has 40. When Anna maximizes her utility level is equal to
A. 100. B. 5,000. C. 200. D. 10,000.