Suppose that the nominal exchange rate is 80 yen per dollar, that the price of a basket of goods in the U.S. is $500 and the price of a basket of goods in Japan is 50,000 yen. Suppose that these values change to 100 yen per dollar, $600, and 70,000 yen. Then the real exchange rate would
a. appreciate which by itself would make U.S. net exports fall.
b. appreciate which by itself would make U.S. net exports rise.
c. depreciate which by itself would make U.S. net exports fall.
d. depreciate which by itself would make U.S. net exports rise.
a
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The high cost of advertising during the Super Bowl will
A) not affect the efficient level of output because advertising is a sunk cost. B) will affect the efficient level of output because profits will fall significantly. C) not affect the efficient level of output because advertising is a fixed cost. D) Not enough information given.
Human capital is defined as
a. the skills and knowledge possessed by workers b. the tools used by labor c. equipment and machinery used to train workers d. buildings purchased by households rather than by businesses e. equipment and machinery used to aid household production and increase available leisure time
Market economies have air and water pollution, but nonmarket economies
A. have much less pollution. B. have pollution that is much worse than in market economies. C. have about the same amount of pollution as market economies. D. do not generally suffer from external effects of any sort.
Why is the demand for resources called a “derived” demand? On what two factors does the strength of the demand for resources depend? How are these two factors related?
What will be an ideal response?