The exchange rate:
a. states the price of one currency in terms of another currency
b. is the rate at which one country's money is flowing to a second country.
c. is closely related to the concept of comparative advantage.
d. is closely related to the concept of absolute advantage.
a
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The government of Lithasia has decided to set a minimum price for certain agricultural products in order to safeguard the interests of farmers. This is an example of a ________
A) price floor B) price ceiling C) Pigouvian tax D) Pigouvian subsidy
Suppose that the BMW plant in Spartanburg, SC, produces $10 million worth of vehicles in a given year. Of this total amount, $1 million in profits are returned to the owners of the company in Germany. The $1 million in profits
A) contributes to both U.S. GDP and U.S. GNP. B) contributes to U.S. GNP, but not U.S. GDP. C) contributes to U.S. GDP, but not U.S. GNP. D) contributes to neither U.S. GDP, nor U.S. GNP.