Assuming no change in the nominal exchange rate, how will a lower rate of inflation in the United States relative to Canada affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)

To describe recessions as a "cluster of errors" in the economy means

A) markets never clear, even in the best of times. B) something has caused people to systematically misread the signals provided by the market process. C) the laws of supply and demand have failed to work. D) monopolies force people out of work.

Consider the production possibilities frontier displayed in the figure shown. The opportunity cost of a bushel of apples is:

A. 1/30 watermelons. B. 1/40 watermelons. C. 3/20 watermelons. D. 1/20 watermelons.