A large and growing current account deficit can be an indicator of a potential crisis

If the price level in the U.S. is 120, the price level in South Africa is 140, and the nominal exchange rate is 7 South African rands per dollar, then the real exchange rate is

A) 6 South African goods per U.S. good. B) 8.4 South African goods per U.S. good. C) 9.8 South African goods per U.S. good. D) 1.4 South African goods per U.S. good.

The figure above shows the market for coffee If the government pays the coffee producers a subsidy and production increases to 30 million pounds per day, the deadweight loss is

A) zero. B) $7.5 million. C) $15 million. D) $10 million.