A country's exchange rate is the
A) price of its currency in terms of another currency.
B) ratio of imports to exports.
C) ratio of exports to imports.
D) ratio of net exports to real GDP.
Ans: A) price of its currency in terms of another currency.
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The supply curve will shift to the left when
A) the supply of the product increases. B) the demand for the product decreases. C) some producers leave the industry. D) the product becomes fashionable.
(Consider This) Some economists believe that modest inflation, say 2-3 percent, might help reduce unemployment during recessions. What is the argument of economists who reject this idea?
A. Consumers would stop buying goods at higher prices, reducing demand, output, and employment. B. Firms will pocket the profits resulting from higher prices and have no incentive to expand output and employment. C. Wages and other costs would rise with the inflation, keeping firms from expanding employment. D. Consumer spending would shift to cheaper imported goods, reducing domestic demand and employment.