The U.S. dollar exchange rate, e, where e is the nominal exchange rate expressed as Japanese yen per U.S. dollar, will appreciate when:
A. U.S. consumers increase their preference for Japanese cars.
B. the U.S. Federal Reserve eases monetary policy.
C. the Bank of Japan eases monetary policy.
D. the Bank of Japan tightens monetary policy.
Answer: C
Economics
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A firm increases its price from $8 to $10 and sees demand for the product fall by 25%. What would the price elasticity of demand be for this product?
a. 0.75 b. 1 c. - 1 d. -1.25 e. 1.25
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If the GDP deflator in the United States is 114, and the GDP deflator in Ukraine is 142, which of the following exchange rates would the theory of purchasing power parity predict in the long run? (The Ukrainian currency is the hryvnia.)
A) 0.80 hryvnias per dollar B) 1.25 hryvnias per dollar C) 2.80 hryvnias per dollar D) 28 hryvnias per dollar
Economics