If we let P = the domestic price of a basket of goods and Pf the foreign price of the same basket of goods, and ? = the nominal exchange rate of U.S. $/foreign currency the real exchange rate is best expressed as:
A. Pf / P × ?
B. P / Pf ×?
C. ? × P / Pf
D. Pf / P
Answer: B
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The financial market shock which occurred during the recession of 2007-2009 increased the default-risk premium, and the housing shock which occurred during the recession of 2007-2009 reduced wealth and residential construction
These two events would result in A) a movement up along the Phillips curve. B) a movement down along the Phillips curve. C) an upward shift of the Phillips curve. D) a downward shift of the Phillips curve.
Which of the following changes in the price index produces the greatest rate of inflation: 100 to 110, 150 to 165, or 180 to 198?
a. 100 to 110 b. 150 to 165 c. 180 to 198 d. All of these changes produce the same rate of inflation.
The discussion of Figure 2.2 in the text indicates that quantity demanded for most goods tends to increase as income rises. However, the quantity of bananas demanded in the U.S. tends to decrease as income rises
Under this condition, we expect that an increase in consumer income shifts the demand curve for bananas: A) rightward B) no shift. C) leftward. D) upward.
The rate of interest that you pay on a home loan depends upon all of the following EXCEPT
A) the supply of houses in the real estate market. B) the length of the loan. C) your credit rating. D) handling charges or loan fees.