According to purchasing-power parity, if the same basket of goods costs $100 in the U.S. and 50 pounds in Britain, then what is the nominal exchange rate?
a. 2 pounds per dollar
b. 1 pound per dollar
c. 1/2 pound per dollar
d. None of the above is correct
c
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Two goods are said to be substitutes when a fall in the price of one good:
A) leads to a left shift in the demand for the other good. B) leads to a rise in the price of the other good. C) doesn't affect the demand for the other good. D) leads to a right shift in the demand for the other good.
If total fixed cost increases, which of the following will NOT change?
A) total cost B) average fixed cost C) marginal cost D) average total cost E) ALL costs increase when total fixed cost increases.
If the full-employment level of Macroland's aggregate economy is $1,600 billion and its economy is currently in an equilibrium at $2,100 billion, then Macroland
a. has a recessionary gap b. needs an expansion in aggregate expenditures c. needs a reduction in aggregate supply d. has an inflationary gap e. needs an aggregate demand expansion
A sizable appreciation of the U.S. dollar in the mid-1980s
a. raised U.S. exports and imports. b. raised U.S. exports and reduced imports. c. reduced U.S. exports and imports. d. reduced U.S. exports and raised imports.