The rate at which two currencies can be traded for each other is called the ________ exchange rate.
A. flexible
B. nominal
C. real
D. fixed
Answer: B
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Two advisors to the president have given their policy recommendations, and they are in disagreement. Why do these economists disagree?
A. Because they do not have all relevant information about the problem B. Because they disagree on the nature of some cause–effect relationship C. Because they have different values and opinions D. All of the above are reasons for disagreements among economists.
A country benefits from trade if it is able to obtain a good from a foreign country:
a. that has a very low domestic demand. b. the production of which requires a steady supply of unskilled labor. c. by giving up less of other goods than it would have to give up to obtain the good at home. d. by giving up more of other goods than it would have to give up to obtain the good at home. e. that has a substantial number of substitutes in the domestic market.
What are the coordinates for the new long-run equilibrium?
a. P3 and Q3
b. P2 and Q2
c. P1 and Q1
d. P3 and Q2
Surpluses drive market prices up; shortages drive them down.
Answer the following statement true (T) or false (F)