The real exchange rate is the nominal exchange rate, defined as foreign currency per dollar, times
a. U.S. prices minus foreign prices.
b. U.S. prices divided by foreign prices.
c. foreign prices divided by U.S. prices.
d. None of the above is correct.
b
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A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.
Answer the following statement true (T) or false (F)
When one firm sells a good or service that has no close substitutes and a barrier blocks the entry of new firms, what type of market is this?
A) perfect competition B) only monopoly C) oligopoly D) only monopolistic competition E) either monopoly or monopolistic competition
What does the negative slope of the utilities possibilities frontier imply?
A) Diminishing marginal utility. B) The only way to increase one person's utility is to decrease another person's utility. C) Diminishing marginal rates of substitution. D) The only way to increase output of one good is to decrease output of another.
Given that resources can be allocated by the government, the market, a random process, or on a first-come first-serve basis, which of the following statements is true?
a. The market system is not entirely fair but it creates incentives to increase supplies and improve standards of living. b. The random process of allocation allows individuals to acquire purchasing power and enhances the value of the resources that they own. c. Since the government system does not distinguish between those who have income and those that do not, government allocation of resources is the most efficient. d. There will be no shortages under the first-come first-serve basis of allocation. e. A random process of allocation is fair in the sense that everyone gains and there are no losers.