The nominal exchange rate is the:
A. rate at which two currencies can be traded for each other.
B. quantity of foreign currency assets held by a government for the purpose of purchasing the domestic currency in the foreign exchange market.
C. price of the average domestic good or service relative to the price of the average foreign good or service, when prices are expressed in terms of a common currency.
D. market on which currencies of various nations are traded for one another.
Answer: A
You might also like to view...
If a non-discriminating monopolist decides to lower its price to sell one more unit of its product, then
a. total revenue rises by an amount equal to the price b. some revenue is lost to the extent that units previously sold at a higher price now sell for a lower price; however, the additional unit sold brings in new revenue c. marginal revenue increases when total revenue increases d. the net effect on total revenue is typically zero since the price must fall e. the net effect on total revenue is typically negative since the price must fall
If a nation's terms of trade rises from 95 to 106, then we can conclude
a. the gains from international trade are reduced b. the ratio of export to import prices must have decreased c. its imports have become relatively cheaper compared to its exports d. its purchasing power is now lower than before e. that 106 is impossible because the terms of trade cannot exceed 100
Government failure may occur die to:
a. short run focus of elected officials b. special-interest group influence c. difficulty is measuring the marginal social benefit and the marginal social cost of government spending d. all of the above
Three employers have justified their actions as follows. Whose logic is not consistent with the logic of efficiency wage theory?
a. Instead of spending money on an electronic timing system that monitors worker hours, Tom spends an equivalent amount of money on higher wages. b. Dick pays his workers less than the equilibrium wage so that they will not have the time or money to look for work somewhere else. c. Harry pays his workers in a developing country more than the going wage hoping that they will get a better diet and so be more productive. d. None of the above is consistent with the logic of efficiency wage theory.