If a nation trades with another nation in a foreign currency (such as some commodities sold that are priced in U.S. dollars), then, when nominal exchange rates change, the real effective exchange rate will:
a. change by more.
b. change by less.
c. change in exactly the same proportion.
d. not change at all.
Ans: b. change by less.
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Which of the following are considered money?
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Assume that both high and low quality appliances are sold in the used appliance market. If we assume asymmetric information with sellers having more information regarding quality than buyers, which of the following is necessarily true? The
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