If the cost of a typical basket of goods in the U.S. is $100 and in Germany it is 200 euros, and the nominal exchange rate is 0.7 euro per dollar, what is the real exchange rate?
A. 1.50.
B. 3.50.
C. 0.35.
D. 0.50.
Answer: C
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In the U.S., the following agencies have the right to examine the bank's books
A) Fed and the FDIC. B) FDIC and the Office of the Comptroller of the Currency. C) Fed and the Department of Commerce D) FDIC, Fed and the Office of the Comptroller of the Currency. E) Only the Fed.
The prisoner's dilemma provides an explanation for
a. the price wars that sometimes occur in oligopolies b. the ability of firms in an oligopoly to extract the entire consumer surplus c. the collusive behavior that sometimes occurs in an oligopoly d. the failure of firms in non-competitive industries to maximize profits e. an irrational behavior that occurs in competitive markets
The aggregate demand curve is downward sloping because:
a. an increase in the price level will cause an increase in spending. b. at lower price levels, real wealth decreases, causing a decrease in the quantities of goods and services demanded. c. at lower price levels, interest rates decrease, causing a decrease in the quantities of goods and services demanded. d. at lower price levels, exports increase, causing an increase in real GDP. e. increases in the price level do not affect people's real wealth.
A point beyond the boundary of an economy's production possibilities curve is: a. efficient
b. inefficient. c. attainable. d. unattainable.