A country's exchange rate is the
A) price of its currency in terms of another currency.
B) ratio of imports to exports.
C) ratio of exports to imports.
D) ratio of net exports to real GDP.
Ans: A) price of its currency in terms of another currency.
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Answer the following statement(s) true (T) or false (F)
1. A rise in absolute prices guarantees that relative prices will rise as well. 2. If the relative price of a gallon of water in terms of milk increases from 1 gallon to 1.5 gallons of milk, then the relative price of milk has fallen. 3. If all absolute prices increase by 10%, then the economy's relative prices will remain unchanged. 4. An increase in the price of gasoline relative to telephones will cause inflation. 5. When silk is shipped from China to Atlanta, transportation costs will make the price of high-quality silk relative to low-quality silk higher in Atlanta than in China
A point to the left of the BP curve would represent
A) a balance of payments deficit. B) a balance of payments surplus. C) internal disequilibrium. D) Both A and C.
When property rights are poorly defined,
a. positive or negative externalities may result b. the market cannot generate an equilibrium price c. the market price becomes highly unstable d. the market must be relied upon to generate efficient allocation of resources e. no externalities can exist
A fundamental source of monopoly market power arises from
a. perfectly elastic demand. b. perfectly inelastic demand. c. barriers to entry. d. availability of "free" natural resources, such as water or air.