If the foreign exchange rate is $1 is equivalent to 5 Swiss francs, then 1 Swiss franc is worth
A. $5.
B. 50 cents.
C. 20 cents.
D. 5 cents.
C. 20 cents.
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Which of the following is not a component of the M1 money supply?
a. demand deposits b. large-denomination (more than $100) bills c. interest-earning checking deposits d. outstanding balances on credit cards
What will decrease SRAS?
a. improvements in technology b. increases in the capital shock c. decreases in consumer confidence d. increases in wages
The input-substitution effect of an increase in the wage comes about because higher wages:
A. increase production costs, and final good prices will rise, reducing the quantity demanded of the product. B. increase production costs, and final good prices will rise, increasing the quantity demanded of the product. C. make labor less expensive as an input, leading firms to switch to labor as an input. D. make labor more expensive as an input, leading firms to switch to other inputs.
If there are no interventions by finance ministers or control banks in the international market, then
A. the current account will be greater than the financial market. B. the capital market will equal the current account. C. the capital market will be greater than the current account. D. the current account and the capital account must sum to zero.