If the exchange rate for the euro changes from $1 = 0.81 euro to $1 = 1.14 euro, then the:
A. Euro has appreciated
B. Dollar has appreciated
C. Dollar has depreciated
D. Value of euros has increased
B. Dollar has appreciated
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Assume that the real rate of interest is 5 percent and a lender charges a nominal interest rate of 15 percent. If a borrower expects that the rate of inflation next year will be 10 percent and the actual rate of inflation next year is 12 percent:
a. neither the borrower nor the lender benefits from inflation. b. both the borrower and the lender lose from inflation. c. the borrower benefits from inflation, while the lender loses from inflation. d. the lender benefits from inflation, while the borrower loses from inflation.
An example of an implicit cost of production is: a. the cost of leather used in manufacturing furniture
b. the opportunity cost of space in your home that is used for a home office. c. the wages paid to high school students that work in a fast-food restaurant. d. none of the above.
A negative cross-elasticity of demand for two products indicates that they are:
A. complements. B. independent goods. C. normal goods. D. substitutes.
Which of the following DOES NOT contribute to the market power of a firm?
A) number of available substitutes B) the color of the product C) legal protections D) the number of firms in the market