When the exchange rate moves from $1 = CAD1.5 to $1 = CAD1.66, it implies:
a. the U.S. dollar has depreciated in relation to the Canadian dollar.
b. U.S. imports of Canadian goods will rise.
c. the dollar price of the Canadian dollar has risen.
d. the Canadian dollar has appreciated in relation to the U.S. dollar.
e. Canadian imports of U.S. goods will rise.
b
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When the price of a product decreases, the purchasing power of our income increases and thus permits consumers to purchase more of the product. This statement describes
A. the income effect. B. an inferior good. C. the rationing function of prices. D. the substitution effect.
In general, during the business cycle, when economic activity is peaking:
a. interest rates begin to creep higher b. unemployment levels are low c. inflation begins to edge higher d. all of the above
Which of the following transactions would be included in GDP for 2015?
A. On January 5, 2015, Chris Carter sold 100 shares of stock in IBM Corporation. B. Bonita Delgado purchases a new 2015 Chevrolet on March 10, 2015. C. Nadav Daniel buys a used desk from the “Struggling Students Used Furniture” store on May 9, 2015. D. Levi Lathan purchases a 75-year-old penthouse on Lake Shore Drive in Chicago, Illinois, on June 23, 2015.
The exchange rate for the Mexican peso changes from $1 = 5 pesos to $1 = 6 pesos. This change will lead to:
A. U.S. goods becoming less expensive for Mexicans B. Mexican goods becoming more expensive for Americans C. An increase in U.S. exports to Mexico D. A decrease in U.S. exports to Mexico