The real exchange rate between two currencies tells us:
a) changes in the exchange rate over time
b) how many units of one currency can be purchased with one unit of the home currency
C) how much in terms of goods and services the home currency will buy in the foreign nation compared to the home nation
Ans: C) how much in terms of goods and services the home currency will buy in the foreign nation compared to the home nation
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According to the graph shown, if the market goes from equilibrium to having its price set at $10 then:
A. area (C + E) is deadweight loss.
B. area B is transferred surplus from consumers to producers.
C. $12 of surplus gets transferred from consumers to producers.
D. All of these are true.
Wal-Mart's store managers have the authority to stock items and price them to satisfy localized demand. Which of the following properties of this retail store is illustrated here?
a. Relationship with employees b. Regional relationships c. Centralized decision making d. Decentralized decision making
Answer the following statements true (T) or false (F)
1. National income accountants eliminate double counting of intermediate goods by using only the value of final goods. 2. Current disposable income can be adjusted for price changes and population changes to yield real per capita disposable income. 3. A transfer payment is a payment of money in return for which no current goods or services are produced. 4. The value of leisure is not taken into consideration in GDP accounting. 5. When final sales are less than GDP, a net reduction in inventory has taken place.
Fiscal and monetary policy can reduce unemployment with no negative side effects
a. True b. False Indicate whether the statement is true or false