Year-to-year movements in real exchange rates between industrialized countries like the U.S. and Canada are caused mostly by
A) changes in relative rates of inflation.
B) changes in relative growth rates of output.
C) changes in quotas or tariffs.
D) changes in capital controls.
E) changes in nominal exchange rates.
E
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Suppose you hold $50 to buy groceries weekly and then the price of groceries increases by 5 percent. To be able to buy the same amount of groceries, what must happen to your nominal money holdings?
A) They must increase by $5. B) They can decrease by $5. C) They must increase by $2.50. D) They must increase, but the amount of the increase depends on income.
When the U.S. government buys aircraft from BAe, a British corporation, it pays for them using
A) euros. B) pounds. C) dollars. D) foreign exchange rates.
The object of U.S. technological choices, according to Rosenberg (1963), was to conserve scarce productive factors and exploit plentiful ones
Indicate whether the statement is true or false
The rule guiding international specialization of production is that a country should specialize in the production of the good
a. for which it has the highest opportunity cost b. for which it has the lowest opportunity cost c. that it most wants to consume d. for which it has an absolute advantage e. that it can produce with the least quantity of capital