Suppose the current exchange rate is $1.60 per pound. A sweater purchased by an American in London costing 50 pounds would cost
a. $31.25
b. $80.00
c. $51.60
d. $48.40
e. $100.00
B
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Under a fixed exchange rate system, if the inflation rate in the United States is 0 percent a year and the inflation rate in Australia is 5 percent a year, then the U.S. real exchange rate will
A) may increase or decrease. B) decrease 5 percent a year. C) remain constant. D) increase 5 percent a year.
Currently, union membership in the United States is about:
a. 10 percent. b. 15 percent. c. 20 percent. d. 25 percent.
The government is seen by many economists to be the agency that best resolves the problem of negative externalities because it
a. can create positive externalities that compensate for the negative ones b. has access to more information than any private firm or individual and can act more objectively than any private firm or individual c. is the only one affected by negative externalities d. gains the most from negative externalities e. has the power to distribute the bonuses resulting from negative externalities
A special interest group has a good chance of redistributing (transferring) income from others to itself if the
A) costs of the transfer are spread over a very large number of people. B) costs of the transfer are spread over a very small number of people. C) costs of the transfer are spread over the same number of people that comprise the special interest group. D) the number of members in the special interest group is greater than 100. E) none of the above