If a car costs $44,000 in the U.S. and 40,000 euros in Germany, what does the exchange rate need to be for purchasing power parity to exist?
a) 1 euro = $0.91
b) 1 euro = $1
c) 1 euro = $1.10
d) 1 euro = $1.76
Ans: c) 1 euro = $1.10
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A firm producing compact discs reports the following production information:
# of Workers Total Product (boxes of CDs per hour) 0 0 1 125 2 225 3 305 4 365 5 405 6 425 The compact discs sell in a competitive market at a price of $0.20 per box. The firm hires workers in a competitive labor market at a wage of $12 per hour. The firm is currently hiring four workers and is considering hiring a fifth worker. What would you recommend the firm do? Why?
A change in consumer preferences will shift the budget line
a. True b. False Indicate whether the statement is true or false
One In the News article titled "Sharpest Economic Decline in 26 Years" states that
A. The drop in real GDP in 2008 was the greatest in 50 years. B. Real GDP fell by 6.8 percent in the last quarter of 2007. C. Real GDP fell by 3.8 percent in the last quarter of 2008. D. The drop in real GDP in 2008 was the greatest since the Great Depression.
Suppose there is an increase in the saving rate. Explain what effect this increase in the saving rate will have on the rate of growth of output per worker
What will be an ideal response?