Assume that at the beginning of 2012, one dollar could be traded for 5 yuan. If in 2013 one dollar was being traded for 6 yuan, it can be concluded that:
A) the dollar appreciated against the yuan and the yuan depreciated against the dollar in 2013.
B) the real exchange rate changed in 2013 assuming PPP holds.
C) the nominal exchange rate did not change in 2013.
D) the dollar depreciated against the yuan and the yuan appreciated against the dollar in 2013.
A
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The government prefers a market-based approach to reduce firms' emissions of a toxic gas but wants to make certain that no more than 1,000 cubic yards of the gas are ever emitted in a single day. The most efficient policy under these circumstances is likely to be a system of
a. per-unit taxes on emissions of the gas. b. per-unit taxes on the goods produced by firms that emit the gas. c. subsidies to firms that agree not to emit the gas. d. sales of permits to emit specified quantities of the gas on specified days.
Answer the following questions:
a. What does GDP measure, and why is it a useful tool for economists, business decision makers, and government policy makers? b. Explain at least two important things GDP does not measure.