The exchange rate is the
a. ratio of exports to imports
b. interest rate the U.S. government charges on international transactions
c. pricing policy of goods scheduled for export
d. price of one nation's currency in terms of another nation's currency
e. price that central banks charge each other for currency exchanges
D
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An example of an institutional requirement for the operation of effective private markets is
(a) enforcement of contracts. (b) the ability of government to correctly project trends. (c) the ability of advertisers to influence consumers. (d) all of the above.
Public choice analysis indicates that elected political officials will find debt financing
a. unattractive because voters will recognize that excessive debt will lead to the future collapse of the economy. b. attractive because countries with a higher debt to GDP ratio generally grow more rapidly. c. unattractive because both politicians and voters will recognize that a larger outstanding debt will mean higher future taxes. d. attractive because current spending can provide voters with highly visible goods, services, and transfer payments, while borrowing will push the most visible cost of this spending into the future.