If the exchange rate is 2 Brazilian reals per dollar and a meal in Rio costs 20 reals, then how many dollars does it take to buy a meal in Rio?
a. 40 and your purchase will increase Brazil's net exports.
b. 10 and your purchase will increase Brazil's net exports.
c. 40 and your purchase will decrease Brazil's net exports.
d. 10 and your purchase will decrease Brazil's net exports.
b
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In an open economy, a decrease in the government's budget deficit will ________ the domestic real interest rate and ________ the level of capital investment in the country, holding other factors constant.
A. increase; increase B. decrease; increase C. increase; decrease D. decrease; decrease
If a firm located in a country charges high prices on its exports and earns profits on its export sales, then
A. the profit earned by the firm is not considered as a part of the exporting country's gross domestic product (GDP). B. the majority of gains from international trade accrue to the foreign buyers. C. the firm emerges as a natural monopolist in the long run. D. the high export price enhances the exporting country's terms of trade.
The goal of the World Bank is to
A. help finance economic development. B. supervise the activities of the central banks of member nations. C. supervise exchange rate stability. D. sell the government securities of member nations on the open market.
The total costs of regulation
A. are paid entirely by the regulated industries. B. are much higher than just the explicit government outlays to fund the administration of various regulations. C. include increased taxes and increased prices of the products being regulated. D. are paid entirely by the consumers of regulated industries.