Suppose the exchange rate is initially set at 120 yen per dollar and increases to 140 yen per dollar. This would be expected to cause the price of Japanese goods in the U.S. economy to
A. decrease.
B. change in a manner that cannot be determined without additional information.
C. remain the same since domestic demand remains the same.
D. increase.
A. decrease.
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BP and Exxon both produce petroleum products and sell them at the wholesale and retail levels. One of them is also in the coal business. The merger of the two firms is an example of
a. horizontal integration. b. vertical integration. c. both horizontal and vertical integration. d. a tournament.
A Consumer Price Index of 120 for a certain year means that the average price of consumer items in that year was
A. 20% higher than the average price of the preceding year. B. 120% higher than the average price in the base period 1982-84. C. 20% higher than the average price in the base period 1982-84. D. about $120 per basket of consumer goods and services.
The Big Mac index compares:
A. the cost of a Big Mac all over the world. B. the cost of a typical basket for consumers all over the world. C. typical food costs, as food is the largest component of all consumption baskets. D. typical food and energy costs across different locations.
The long-run aggregate supply curve will shift to the right if
A) the economy experiences technological change. B) there is a decrease in population. C) the economy experiences high levels of inflation. D) net exports decrease.