If the price of a car in the United States is $26,000, and the exchange rate between the dollar and the British pound rises from $1.50 to $2.00 per pound, then the price of the American car in Britain will
A. remain the same.
B. fall.
C. rise.
D. be irrelevant, because the British government will impose restrictions on imports from the United States.
Answer: B
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Which of the following shifts the entire consumption function upwards?
A) a decrease in the value of consumer durables B) an increase in consumer wealth C) a decrease in consumer confidence D) an increase in income
Suppose the U.S. dollar weakens against the euro (and against other major currencies). We know with certainty that this weakening of the dollar will cause which of the following to occur?
A) a recessionary gap B) an inflationary gap C) a deflationary gap D) none of the above
A lottery promises a $250,000 prize. But the prize money is paid out in $50,000 annual installments with the first installment received today.. The winner is offered the option of an immediate lump-sum payment. If the interest rate remains at 10 percent for the entire period, what is the smallest amount the winner should accept?
a. $189,540 b. $192,970 c. $208,494 d. $225,000
Economic growth is only possible if the long-run aggregate ______ curve shifts to the ______.
A. supply; right B. supply; left C. demand; right D. demand; left