If the nominal exchange rate rises and price levels stay constant, the real exchange rate will
A) rise.
B) fall.
C) stay constant.
D) could rise, fall or stay constant.
A
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The Keynesian consumption function does not display consumption smoothing, because ________
A) the average propensity to consume rises with income B) the marginal propensity to consume is constant C) consumption is not affected by the real interest rate D) consumption is not affected by future income
Assume that an economy is in equilibrium when there occurs an increase in the supply of capital. The available quantity of labor remains fixed. Once the economy has adjusted to its new equilibrium, which of the following has increased?
A) the real wage B) the rental price of capital C) the share of capital income in national income D) all of the above E) none of the above
If the U.S. can produce pizza for $5 each and barrels of beer for $25 each, and Germany can produce pizza for $7 each and barrels of beer for $21 each, then
A) each country will produce both pizza and beer. B) the U.S. will produce beer and trade with Germany for pizza. C) the U.S. will produce pizza and trade with Germany for beer. D) All of the above.
Moral hazard arises when principals find it costly to monitor agents
Indicate whether the statement is true or false