Refer to Exhibit 2-1. The PPF illustrates
 ANSWER 3.png)
constant opportunity costs between guns and butter.
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Today, one U.S. dollar exchanges for 1.10 euros. The next morning the same dollar exchanges for 1.07 euros. We can conclude that the dollar has ________ and the euro has ________
A) depreciated; appreciated B) appreciated; appreciated C) appreciated; depreciated D) depreciated; neither appreciated nor depreciated E) depreciated; depreciated
The rate at which a person is willing to give up a gallon of gasoline to get one more pound of coffee and remain on the same indifference curve is called his or her
A) relative cost of coffee in terms of gasoline. B) indifference cost of coffee. C) personal price of coffee. D) marginal rate of substitution.
The Taylor rule predicted a federal funds rate which was ________ that set when Paul Volcker was chairman of the Fed, and a rate which was ________ that set when Arthur Burns chaired the Fed
A) less than; equal to B) greater than; less than C) greater than; equal to D) less than; greater than
In forward transactions,
A) the exchange takes place at the same exchange rate as in the spot market. B) currencies are exchanged at a set date in the future. C) currencies may only be exchanged at rates set by governments well in advance. D) currency is bought and sold for delivery later that same day.