If a dollar buys more corn in the U.S. than in Mexico, then
a. the real exchange rate is greater than 1; a profit might be made by buying corn in the U.S. and selling it in Mexico.
b. the real exchange rate is greater than 1; a profit might be made by buying corn in Mexico and selling it in the U.S.
c. the real exchange rate is less than 1; a profit might be made by buying corn in the U.S. and selling it in Mexico.
d. the real exchange rate is less than 1; a profit might be made by buying corn in Mexico and selling it in the U.S.
c
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
A swap that involves the exchange of one set of interest payments for another set of interest payments is called
A) an interest rate swap. B) a currency swap. C) a swaption. D) an international swap.
A change in the dollar value of the British pound from $1.60 to $1.50 represents
A) an increase in the pound price of British goods. B) an appreciation of the dollar relative to the pound. C) an appreciation of the pound relative to the dollar. D) an increase in the dollar price of British goods.
If net exports are a negative number, then:
a. we are not buying enough exports. b. we are buying too many exports. c. GDP will underestimated when measured using the expenditure approach. d. we are exporting more than we are importing. e. we are exporting less than we are importing.