A pair of running shoes costs $70 in the U.S. If the price of the same shoes is 4500 rupees in India and the exchange rate is 60 rupees per dollar, than the real exchange rate is
a. more than 1, so a profit could be made by buying these shoes in the U.S. and selling them in India.
b. more than 1, so a profit could be made by buying these shoes in India and selling them in the U.S.
c. less than 1, so a profit could be made by buying these shoes in the U.S. and selling them in India.
d. less than 1, so a profit could be made by buying these shoes in India and selling them in the U.S.
c
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In the long run, in a competitive industry
a. economic profits are zero b. firms break even c. price equals average cost d. all of the above
If a bank's reserves are exactly equal to the required amount of reserves, then it has no excess reserves
a. True b. False Indicate whether the statement is true or false
When the U.S. price level increases, economists predict a:
A. movement down along the aggregate demand curve. B. shift straight up of the aggregate demand curve. C. shift to the right of the aggregate demand curve. D. decrease in expenditure.
Which of the following statements are correct?
What will be an ideal response?