If the exchange rate for Micromania's micros to United States's dollars is 50 micros = $1, then micros have appreciated when the exchange rate becomes
a. 100 micros = $2
b. 100 micros = $1
c. 25 micros = $0.50
d. 25 micros = $0.25
e. 25 micros = $0.75
E
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A firm's market constraints include the conditions under which it can
A) convert inputs into outputs. B) buy its inputs and sell its outputs. C) issue stock. D) produce the inputs to production.
Other things equal, in an open economy, monetary policy to offset a contractionary gap will tend to
a. Lower the exchange value of the dollar and lower net exports. b. Lower the exchange value of the dollar and raise net exports. c. Raise the exchange value of the dollar and lower net exports. d. Raise the exchange value of the dollar and raise net exports.
Often, government spending increases due to log-rolling among politicians. Log-rolling is when politicians vote for which of the following?
a. projects the government leadership supports even when the citizens who elected the politician do not b. projects in their districts that are not efficient for the nation c. projects they normally would not support in return for other politicians voting for their projects d. projects that have benefits for the nation that outweigh their costs
Which of the following would most likely cause a nation's currency to appreciate?
a. an increase in inflation of the nation's trading partners b. an increase in the nation's domestic inflation rate c. a decrease in domestic real interest rates d. an increase in real interest rates abroad