Holding other things constant, if the US dollar depreciates, it makes the US exports
a. Less attractive to foreigners
b. More attractive to foreigners
c. Neither more nor less attractive to foreigners
d. None of the above
b
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Refer to the scenario above. If India wants to repay a lower sum of money to the U.S., it should:
A) peg the exchange rate below 50 rupees per dollar. B) peg the exchange rate to 60 rupees per dollar. C) continue to use a flexible exchange rate regime. D) peg the exchange rate to 70 rupees per dollar.
We would expect that a fall in labor supply will have a proportionately smaller effect on the market wage rate when
A) workers can easily be replaced by capital goods. B) the product produced in the industry has very few substitutes. C) the product is produced in a perfectly competitive industry. D) labor represents a relatively small portion of total costs.