If the real exchange rate is less than 1, then the
a. nominal exchange rate x U.S. price > foreign price. The dollars required to purchase a good in the U.S. would buy more than enough foreign currency to buy the same good overseas.
b. nominal exchange rate x U.S. price > foreign price. The dollars required to purchase a good in the U.S. would not buy enough foreign currency to buy the same good overseas.
c. nominal exchange rate x U.S. price < foreign price. The dollars required to purchase a good in the U.S. would buy more than enough foreign currency to buy the same good overseas.
d. nominal exchange rate x U.S. price < foreign price. The dollars required to purchase a good in the U.S. would not buy enough foreign currency to buy the same good overseas.
d
You might also like to view...
What does the text suggest might be a possible advantage of being an economically "backward" nation?
A) Illiteracy B) The fact that many women have been systematically denied education, and have therefore learned to become very good homemakers, which is a prerequisite for a stable society C) The nation can adopt the advanced technologies of other nations without having to incur all the costs of research and development. D) If you invert the per capita GDP figures of the so-called "backward" countries, you find they are, in real terms, among the wealthiest nations in the world.
Absolute advantage
a. is the same as comparative advantage b. implies autarky c. means that countries of the same size have the same opportunity cost of producing both goods d. means that a country can produce more of two goods than another country can e. means that a country can produce less of two goods than another country can
The difference between economic profit and accountant's definition of profit is that an economist's total cost counts the ____ of inputs
a. absolute value b. overheads c. opportunity cost d. gross cost
When the government runs a deficit, it will:
A. raise taxes immediately. B. buy bonds to finance the deficit. C. sell bonds to finance the deficit. D. reduce the money supply to finance the deficit.