Under the purchasing-power-parity theory, if a certain market basket of identical goods costs $10,000 in the United States and 2,500 euros in France, the exchange rate should be ______.
a. $1 to 1 euro
b. $2 to 1 euro
c. $3 to 1 euro
d. $4 to 1 euro
d. $4 to 1 euro
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Banks create money by keeping a small percentage of deposits in reserves and __________ the remaining funds, charging interest.
a. lending b. spending c. saving d. investing
The quantity of one good that is given up to produce another is defined to be its
a. market value b. opportunity cost c. relative cost d. absolute cost e. nominal cost
The design of tax policy is one of the responsibilities of economists who work at the
a. Council of Economic Advisers. b. Federal Reserve. c. Department of the Treasury. d. Congressional Budget Office.
Of the three big? questions, what?, how?, and for whom?, which of the following is an example of a how ?question?
A. Why do we use machines rather than migrant workers to pick? grapes? B. Why do doctors and lawyers earn high? incomes? C. Why do college football coaches earn more than? professors? D. Why? don't we produce more small cars and fewer gas? guzzlers?