Given the U.S. price level P, the foreign country price level P*, and the real exchange rate RER in foreign currency per U.S. dollar, the nominal exchange rate E would be given by
A) E = RER × (P/P*).
B) E = RER × (P*/P).
C) E = (P/P*) / RER.
D) E = P × (RER/P*).
B
Economics
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Between 1960 and 2013 U.S. GDP, measured in dollars of constant purchasing power, expanded about 5.0 times. However, the standard of living only increased by 4 times over this period. Explain the difference
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Refer to the diagram. The average propensity to consume:
A. is greater than 1 at all levels of disposable income above $100.
B. is greater than 1 at all levels of disposable income below $100.
C. is equal to the average propensity to save.
D. cannot be determined from the information given.
Economics