If the real exchange rate is 5/4 pounds of Chilean beef per pound of U.S. beef, a pound of U.S. beef costs $2 and the nominal exchange rate is 500 Chilean pesos per dollar, then Chilean beef costs
a. 1,250 pesos per pound.
b. 800 pesos per pound
c. 250 pesos per pound.
d. None of the above is correct.
b
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The role that prices play in distributing scarce goods and services to those consumers who value them the most highly is known as the ________ function of price.
A. multiplicative B. rationing C. equilibrium D. allocative
The Friedman rule works because
A) it maximizes productivity. B) it eliminates over-consumption. C) it encourages people to hold the appropriate quantity of money. D) it can be implemented by the private sector.
A vertical demand curve
A) is impossible. B) reasonably represents demand for essential goods. C) has a price elasticity of negative infinity since people will pay an infinite amount for the good. D) represents a normal good.
Living wage laws have been instituted at the state level and affect a large number of jobs
Indicate whether the statement is true or false