Suppose a U.S. resident buys a car from a car maker in Japan. This transaction will:
a. have a negative effect on Japan's balance of trade in merchandise.
b. have a negative effect on the U.S. balance of trade in merchandise.
c. have a positive effect on the U.S. balance of trade in merchandise.
d. bring money into the United States.
e. have no effect on Japan's balance of trade in merchandise.
b
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Which of the following is a store of value?
a. currency b. U.S. government bonds c. fine art d. All of the above are correct.
A pair of jeans cost $25 in the U.S. and 1600 dinar in Algeria. If the nominal exchange rate is 75 dinar per U.S. dollar, then the real exchange rate is
a. more than one, so a profit could be made by buying jeans in Algeria and selling them in the U.S. b. more than one, so a profit could be made by buying jeans in the U.S. and selling them in Algeria. c. less than one, so a profit could be made by buying jeans in Algeria and selling them in the U.S. d. less than one, so a profit could be made by buying jeans in the U.S. and selling them in Algeria.