If the market equilibrium value of the nominal exchange rate equals 0.20 U.S. dollars per franc, but the franc is officially fixed at 0.25 U.S. dollars per franc, then the franc exchange rate is ________ and to maintain this exchange rate there will be ________ in the government's stock of international reserves.
A. undervalued; a net decline
B. overvalued; a net increase
C. undervalued; a net increase
D. overvalued; a net decline
Answer: D
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The central fact of economics is
A. Production. B. Equilibrium. C. Efficiency. D. Scarcity.
According to the law of demand, other things being equal
A) when the price a good goes up, then people buy more of that good. B) when the price a good goes up, then people buy less of that good. C) when people's income goes up, then they buy more of a good. D) when people's income goes up, then they buy less of a good.
A realistic production possibilities curve:
A. is concave while a simple PPF has constant opportunity costs. B. is straight lined while a simple PPFhas constant opportunity costs. C. is straight lined while a simple PPF is bowed outward. D. is concave while a simple PPFhas increasing opportunity costs.
Janelle earned a salary of $62,000 in 2004 and $80,000 in 2014 . The consumer price index was 126 in 2004 and 170 in 2014 . Janelle's 2004 salary in 2014 dollars is
a. $45,953. b. $89,280. c. $107,953. d. $83,651.