When GDP is measured in "current prices" it is known as the:
A. real GDP.
B. nominal GDP.
C. real GNP.
D. nominal GNP.
Answer: B
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An exchange-rate system in which the nominal exchange rate is set by the government is known as
A) a flexible exchange-rate system. B) a floating exchange-rate system. C) a fixed exchange-rate system. D) an exchange-rate union.
Suppose a decline in U.S. income causes Americans to decrease their demand for all normal goods, including those produced in Europe. How will this change affect the foreign exchange market?
a. A decrease in U.S. income will increase the U.S. demand for foreign exchange, thus increasing the dollar-per-euro exchange rate, making European goods more expensive to U.S. residents. b. A decrease in U.S. income will decrease the U.S. demand for foreign exchange, thus decreasing the dollar-per-euro exchange rate, making European goods cheaper to U.S. residents. c. A decrease in U.S. income will decrease the U.S. supply of foreign exchange, thus increasing the dollar-per-euro exchange rate, making European goods cheaper to U.S. residents. d. A decrease in U.S. income will increase the U.S. supply of foreign exchange, thus increasing the dollar-per-euro exchange rate, making European goods expensive to U.S. residents.
When a corporation needs capital to expand, its choices are
A. to sell stocks on a stock exchange. B. to sell bonds. C. to reinvest its own earnings. D. All of these responses are correct.
When we assume that consumers want to pay the lowest price possible, we assume that consumers are:
A. cheap. B. deceitful. C. rational. D. informed.