Suppose there are two countries (country A and country B) each with its own currency (Currency A and Currency B). Suppose the exchange rate is expressed in terms of amount of Currency B needed to get Currency A. A weakening of Currency A would show up as
A. a decrease in the exchange rate.
B. an increase in the exchange rate.
C. a decrease in the interest rate.
D. an increase in the interest rate.
Answer: A
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ABC news in Australia reported that the average annual wage in 2008 was $13,308. To calculate the real wage rate in Australia, you would need to know
A) Australia's inflation rate between 2007 and 2008. B) Australia's price level in 2008. C) the core inflation rate in Australia in 2008. D) the exchange rate between the U.S. dollar and the Australian dollar.
An American insurance company hires a call center in India to handle customer service calls in order to cut costs. Other things equal, this will ________ of the United States
A) decrease the financial account balance B) decrease net exports C) decrease the capital account balance D) increase the current account balance
A firm that maximizes profits also
A) is inefficient. B) cuts corners in production processes so that its products are made too cheaply. C) uses the least-cost combination of resources. D) pays input prices lower than other firms do.
The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
What will be an ideal response?