An increase in the real exchange rate indicates that
A) domestic goods are now relatively cheaper.
B) domestic goods are now relatively more expensive.
C) foreign goods are now relatively cheaper.
D) both B and C
D
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In a graph of choice sets, a price change causes the slope of budget lines to change.
Answer the following statement true (T) or false (F)
Calculate the price elasticity of supply for the following goods. Also comment on the elasticity in each case
a) When the price of a good is $100, 200 units are supplied. But when the price increases to $300, 220 units are supplied. b) When the price of a good is $50, 50 units are supplied. But when the price decreases to $30, 10 units are supplied.
Factors causing an increase in currency holdings include
A) an increase in the interest rates paid on checkable deposits. B) an increase in the cost of acquiring currency. C) a decrease in bank panics. D) an increase in illegal activity.
Which of the following is NOT true for a perfectly competitive firm?
A) P = MR B) AR = MR C) MR = TR D) P = AR