Assume the nominal dollar-per-euro ($/€) exchange rate appreciates by 2%, U.S. prices rise by 5% and Euro-Area prices rise by 3%. By approximately how much does the real exchange rate change?

a. There is no change.
b. 1%
c. 2%
d. 3%
e. 4%


.A

Economics

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The tastes for foreign goods and services generally has a ________ relationship with aggregate expenditure.

A. positive B. constant C. negative D. skewed

Economics

Exhibit 2-6 Production possibilities curve data  A B C D E F Capital goods150 140 120 90 50     0 Consumer goods    0   20   40 60 80 100 In Exhibit 2-6, the concept of increasing opportunity costs is represented by the fact that:

A. the quantity of capital goods produced must be less than 150. B. the quantity of consumer goods is constant for each change in the quantity of capital goods produced. C. greater amounts of capital goods must be sacrificed to produce each additional unit of consumer goods. D. the amount of consumer goods produced must be greater than zero.

Economics

Refer to the information provided in Figure 2.6 below to answer the question(s) that follow. Figure 2.6Refer to Figure 2.6. Which of the following will shift an economy's production possibility frontier from ppf2 to ppf1?

A. a decrease in the economy's capital stock B. a change in consumer's tastes C. an increase in production efficiency D. economic growth

Economics

In a binding situation,an increase in the Z factors

A. causes the AD curve to become horizontal. B. does not shift the AD curve. C. shifts the AD curve to the right. D. shifts the AD curve to the left.

Economics