Data on the relationship between the U.S. multilateral real exchange rate and the U.S. trade balance shows:
a. a surprising result that the decrease in the trade balance is correlated with an increase (depreciation) of the U.S. dollar multilateral real exchange rate.
b. a predictable result that the increase in the trade balance is correlated with an increase (depreciation) of the U.S. dollar multilateral real exchange rate.
c. a correlation that is so weak it cannot be used to support the theory that the trade balance is related to the real effective exchange rate of the U.S. dollar.
d. a surprising result that the increase in the U.S. trade balance occurs with a decrease (appreciation) in the real effective exchange rate of the dollar.
Ans: b. a predictable result that the increase in the trade balance is correlated with an increase (depreciation) of the U.S. dollar multilateral real exchange rate.
You might also like to view...
Which of the following is a reason for the slow economic growth in former colonial nations?
a. Inadequate foreign aid b. A communist system of government c. Lack of skilled officials d. Religious extremism e. High entrepreneurial skills
Figure 10-4 shows the industry's supply and demand curves in panel (1) and the cost curves of a firm in the industry in panel (2).
At S1, the firm is
a. preparing to shut down.
b. incurring losses.
c. earning zero economic profits.
d. earning economic profit greater than zero.
How does an economy represented by a straight-line production possibilities curve differ from one represented by a traditional production possibilities curve with a bowed shape?
A. In the economy represented by a straight-line production possibilities curve, the law of increasing relative cost does not apply. B. In the economy represented by a straight-line production possibilities curve, neither good is scarce. C. In the economy represented by a straight-line production possibilities curve, there is no opportunity cost. D. In the economy represented by a straight-line production possibilities curve, changing the amount of resources devoted to the production of each good will not alter the amount of each good actually produced.
Research into string theory in advanced subatomic physics would be an example of
A. technological externalities. B. development. C. applied research. D. basic research.