Other things the same, an increase in the foreign price level
a. reduces the real exchange rate. This reduction could be offset by a decrease in the domestic price level.
b. reduces the real exchange rate. This reduction could be offset by an increase in the domestic price level.
c. increases the real exchange rate. This increase could be offset by a decrease in the domestic price level.
d. increases the real exchange rate. This increase could be offset by an increase in the domestic price level.
b
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Short run market supply curves are formed by adding up individual firm supply curves in the industry.
Answer the following statement true (T) or false (F)
If the level of interest rates increases, then the current value and price of a bond paying a fixed interest payment will
A) remain unchanged since its underlying value, the interest payment is fixed. B) fall since new bonds offer higher rates. C) rise since new bonds offer higher rates. D) first rise then fall as bond investors calculate the effects of the change in rates.
A study by economists at the International Monetary Fund compared increases in inflation rates in countries with and without specific inflation targets based on the surge in oil prices in 2007. The results provide
A) no evidence that countries with specific inflation targets were any better off than countries without specific inflation targets. B) evidence that countries with specific inflation targets actually experienced greater increases in inflation than did countries without specific inflation targets. C) evidence that countries with specific inflation targets did experience lower increases in inflation than did countries without specific inflation targets. D) evidence that countries with specific inflation targets experienced no increases in inflation, whereas countries without specific inflation targets experienced significant increases in inflation.
Marginal revenue product is
A) marginal physical product times marginal factor cost. B) marginal physical product times marginal revenue. C) average physical product times marginal revenue. D) marginal physical product times the wage rate.