In France a loaf of bread costs 3 euros. In Great Britain a loaf of bread costs 4 pounds. If the exchange rate is .9 pounds per euro, what is the real exchange rate?
a. 4/2.7 loaves of British bread per loaf of French bread
b. 3.6/3 loaves of British bread per loaf of French bread
c. 3/3.6 loaves of British bread per loaf of French bread
d. 2.7/4 loaves of British bread per loaf of French bread
d
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Some economists argue that the official poverty figures overstate poverty in this country. Why?
What will be an ideal response?
Monopolists are like perfectly competitive firms in that ______.
a. both maximize profits at the output level where marginal revenue equals marginal cost b. both could be earning either profits or losses in the short run c. both are in industries with downward-sloping demand curves d. all of these are true of both of them e. both maximize profits at the output level where marginal revenue equals marginal cost and both could be earning either profits or losses in the short run are true of both of them, but not both are in industries with downward-sloping demand curves
According to rational expectations theory, which of the following is the best approach to lower the inflation rate?
A. preannounced stable government policies B. unpredictable government policies C. first predictable and then unpredictable government policies D. None of these.
Individuals are allowed to deduct a percentage of their expenditures for health care from their taxable income if these expenditures are above a certain amount. This reduces the amount that must be paid in taxes. Allowing for these deductions would ________ vertical and horizontal equity of the federal income tax.
A. not change B. improve C. worsen D. Any of the above answers could be correct.