Suppose the exchange rate is 10 pesos per dollar and you use $1000 to purchase a one-year Mexican bond that pays 10% interest. Next year, the exchange rate is 11 pesos per dollar
Assuming you convert your funds back to U.S. dollars, how much money will you have in one year?
A) $1000
B) $1100
C) $91
D) $0
A
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If the real wage rate is such that the quantity of labor supplied by workers is less than the quantity of labor demanded by firms
A) the economy is at full employment. B) there is a shortage of labor. C) the real wage rate will fall to restore equilibrium. D) actual real GDP equals potential GDP because firms make the decision about how many workers to hire.
Suppose that the United States decided to subsidize a major competitive effort by the semiconductor industry to bring to market the next generation computer chip. Under the current rules of the WTO and GATT, the U.S. effort is
A) allowed as long as the subsidies are a small percent of the total cost. B) allowed as long as the subsidies do not involve a direct payment to the industry. C) not allowed. D) neither allowed nor disallowed. E) allowed as long as the subsidies do not succeed in creating a new product.
If government spending were to increase we expect that the aggregate demand curve will:
A. shift straight down. B. shift to the right. C. remain unchanged but the economy will move down along the curve to a higher quantity. D. remain unchanged but the economy will move down along the curve to a lower quantity.
The opportunity cost of an action includes: a. the monetary expenses incurred as a result of the action
b. the highest valued alternative use of the time spent on the action. c. the benefits received as a result of the action. d. only a. and b.