Suppose that the U.S. price of gold is $35 per ounce and the German price of gold is 100 Deutsche Marks (DMs) per ounce. What is the implied exchange rate between the dollar and the DM?
A) $0.35 = DM1
B) $3500 = DM1
C) $2.8571 = DM1
D) $0.28571 = DM1
Ans: A) $0.35 = DM1
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a. falls as quantity produced increases b. is above the marginal external product c. is a lump sum tax d. helps to increase demand for the taxed product
Historically, which of the following has had the highest average annual rate of return?
a. corporate bonds b. money market mutual funds c. corporate stocks d. U.S. Treasury bonds
Arlo is offered a job in Des Moines, where the CPI is 80, and a job in New York, where the CPI is 125 . Arlo's job offer in Des Moines is for $42,000 . How much does the New York job have to pay in order for the two salaries to represent the same purchasing power?
a. $42,000 b. $65,625 c. $68,880 d. $189,000
Stabilization policy refers to the use of:
A. only fiscal policy. B. policy to shift the long-run aggregate supply curve. C. either fiscal or monetary policy. D. only monetary policy.