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.
B
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A 2 percent increase in income increases the quantity demanded of a good by 1 percent. The income elasticity of demand for this good is _______. The good is a _______ good
A. 2; normal B. –2; inferior C. 1/2; normal D. 2; inferior
Which of the following approaches does not offer an international dependence explanation of underdevelopment?
a. the false paradigm model b. the neoclassical counter-revolution c. the dualistic development model d. the neocolonial dependence model
In a small town of 100 people, there are 10 children under 16, 10 retired people, 60 people with full-time jobs, 3 people with part-time jobs, 3 full-time students over 16, and 4 full-time homemakers. The remaining people did not have jobs, but wanted jobs. What is the unemployment rate in this town?
A. 11.0 percent B. 10.0 percent C. 13.7 percent D. 14.5 percent
An increase in demand for a nation's currency in the foreign exchange market will:
A. cause the nation's currency to appreciate. B. make it more expensive for the nation to import goods. C. cause the nation's balance on current account to shift toward a surplus. D. make it less expensive for foreigners to buy the nation's goods.