If the exchange rate is 8 Moroccan dirhams per U.S. dollars, a crate of oranges costs 400 dirhams in the Moroccan capital of Rabat, and a similar crate of oranges in Miami sells for $55 dollars, then
a. the real exchange rate is greater than one and arbitrageurs could profit by buying oranges in the U.S. and selling them in Morocco.
b. the real exchange rate is greater than one and arbitrageurs could profit by buying oranges in Morocco and selling them in the U.S.
c. the real exchange rate is less than one and arbitrageurs could profit by buying oranges in the U.S. and selling them in Morocco.
d. the real exchange rate is less than one and arbitrageurs could profit by buying oranges in Morocco and selling them in the U.S.
b
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Automatic stabilizers are provisions in the law which create automatic ________ in government spending or ________ in taxes when real output declines.
A. decreases; decreases B. increases; increases C. increases; decreases D. no change; no change
The opportunity to increase profitability is the primary reason that firms decide to export.
a. true b. false
Refer to Figure 15-15. Erickson Power is a natural monopoly because
A) average total cost is still declining when it intersects demand. B) of its continually declining marginal revenue curve as output rises. C) it is a power company and all power companies are natural monopolies. D) its marginal cost lies entirely below its long-run average cost.
The price elasticity of supply is higher when
A) the number of producers in the market increases over time. B) the product in question is a complementary good. C) the number of buyers in the market increases. D) producers have less time to adjust to price changes.