Refer to Figure 19-7. Which of the following is true?
A) Indian exports to the United States are more expensive at exchange rates greater than $.02/rupee than at the equilibrium exchange rate.
B) U.S. imports are more expensive at exchange rates greater than $.02/rupee than at the equilibrium exchange rate.
C) To achieve an exchange rate greater than $.02/rupee, the Reserve Bank of India must buy surplus dollars with rupees.
D) The rupee is overvalued at exchange rates less than $.02/rupee.
A
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The burden of the public debt
a. cannot create inflation b. may create inflation if it is held by the Fed and financed by taxes c. may create inflation if it is held by foreigners d. may create inflation if it is held by the Fed and financed by the creation of deposits in the Treasury's account at the Fed e. may create inflation if it is held by state and local governments and financed by property or sales taxes
Is GDP an accurate measure of a country's well being?
a. Yes, it is the best measure of national well being. b. Yes, provided we use real GDP and not nominal GDP. c. The answer is uncertain, depending on whether GDP is rising or falling. d. No, it is not.
Define a sole proprietorship
What will be an ideal response?
Answer the following statements true (T) or false (F)
1. Do-it-yourself activities of people are a big part of the "underground economy". 2. When businesses have to install anti-pollution equipment to clean up their wastes, they are adding to GDP. 3. GDP tends to understate economic welfare because it does not take into account increases in leisure. 4. All activities included in GDP serve to enrich society. 5. Most activities in the so-called underground economy are illegal activities involving drugs or gambling, for example.