The ________ is the average hourly wage rate measured in current dollars, while the ________ is the average hourly rate measured in the dollars of a given reference base year
A) real interest rate; nominal interest rate
B) nominal wage rate; real wage rate
C) real wage rate; nominal wage rate
D) nominal interest rate; real interest rate
E) inflation rate; real wage rate
B
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An increase in the U.S. demand for foreign exchange will
a. decrease the price of foreign exchange b. decrease the value of the U.S. dollar c. increase the value of the U.S. dollar d. make foreign goods less expensive in U.S. dollars e. make U.S. goods more expensive in foreign exchange
A depreciation in Micromania's currency, the micro, occurs when the exchange rate changes from
a. 50 micros = $2 to 25 micros = $1 b. 100 micros = $2 to 200 micros = $1 c. $1 = 75 micros to $2 = 100 micros d. $3 = 75 micros to $1 = 25 micros e. $1 = 50 micros to $2 = 50 micros
Policy makers:
A. dislike inflation because it redistributes income. B. dislike inflation because it allows individuals to maintain illusions. C. like inflation because it allows individuals to maintain illusions. D. like inflation because it makes society richer.
The figure below shows the U.S. market for imported wine. For simplicity, we consider export supply curves to be flat. Chilean wine is available for $480 per barrel and French wine is available for $420 per barrel.
Suppose the United States has a tariff of $80 per barrel on imported wine. Then, the United States joins a free-trade area with Chile. Calculate the gain arising from trade creation after the United States joins the free-trade area.
A. $800 billion B. $550 million C. $250 million D. $50 million