As the economy becomes more technologically sophisticated, the wage premium can be expected to
A. continue rising.
B. continue falling.
C. rise.
D. fall.
Answer: A
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A decrease in the nominal exchange rate, e, defined as the number of units of the foreign currency that one unit of the domestic currency will buy, indicates that the domestic currency has ________ relative to the foreign currency.
A. become undervalued B. become overvalued C. depreciated D. appreciated
Use the graph below to answer the next question.
Other things equal, an increase the aging population in the United States would do what to the demand for nurses?
A. shift from D3 to D2 B. shift from D2 to D3 C. move from b to a on D1 D. move from a to b on D1
Answer the following statement(s) true (T) or false (F)
1. A country will gain from international trade whenever the world relative price differs from the autarkic relative price. 2. Large countries have more to gain from international trade than small countries do. 3. A perfectly competitive firm is one that can sell any quantity that it wants at any price it wants. 4. A competitive firm faces a downward-sloping demand for its product. 5. For a competitive firm, marginal revenue is constant and equal to the market price.
Everything else equal, if the dollar appreciates against the Chinese yuan:
A) China will stop trading with the U.S. B) China will export more to the U.S. and will import less from the U.S. C) the Chinese government will sell yuan in the foreign exchange market. D) China will import more from the U.S. and will export less to the U.S.