According to purchasing-power parity, if prices in the United States increase by a smaller percentage than prices in the United Kingdom, then the
a. real exchange rate rises.
b. nominal exchange rate rises.
c. real exchange rate falls.
d. nominal exchange rate falls.
b
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Macroeconomics is converging with microeconomics because
A) macroeconomic relationships depend on microeconomic behavior. B) macroeconomics studies total output. C) government deficits and unemployment go together. D) inflation means a general increase in prices. E) microeconomic theories are easily testable whereas macroeconomic theories are difficult to test.
The average-fixed-cost curve
a. is constant. b. is always decreasing. c. intersects marginal cost at the minimum of average fixed cost. d. intersects marginal cost at the minimum of marginal cost.
If the real rate of return is 2 percent, and the inflation rate is 2 percent, then the nominal interest rate must be:
A. ?4 percent. B. ?2 percent. C. 4 percent. D. 2 percent.
Injections to the circular flow model include saving, taxes, exports, and investment.
Answer the following statement true (T) or false (F)