?A widget costs $50 in the US and CAD$53 in Canada. The current exchange rate is 1USD=1.09CAD. At this rate,
a. ?The good costs more in the US
b. ?The good costs more in Canada
c. ?The good costs the same across the two countries
d. None of the above
Answer: a. ?The good costs more in the US
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If purchasing power parity holds between the U.S. and China:
A. the real exchange rate must be 1. B. the nominal exchange rate must be 1. C. the U.S. must no longer have a trade deficit. D. China must no longer have a trade deficit.
Which of the following options would the Fed pursue if it wanted to increase the supply of money in the economy?
a. lowering reserve requirements b. raising the discount rate c. selling bonds d. increasing the interest rate paid on reserves
What does "there is no such thing as a free lunch" mean in economics?
A. That scarce resources are used up to provide "freebies" and giveaways B. That sometimes people may take friends out to lunch and pay for them C. That all items in the lunch menu have specific prices D. That products only have value because people are willing to pay for them
Which of the following is the best example of a broad money?
A. a Treasury bond B. a valuable painting C. a money market account D. all of the above