The chief economist of the country of Borduria has implemented a policy of maintaining the currency of Borduria at a low value compared to its trading partner. This will cause:
a. the Bordurian exports to be cheaper for its trading partner
b. the Bordurian exports to become more expensive for its trading partner.
c. the Bordurian interest rates to be higher than its trading partner.
d. Borduria's imports from its trading partner to become less expensive.
a
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The Ricardian model can be simplified and made more explanatory by assuming that there is only one resource used in producing goods. What did Ricardo assume the resource was?
a. capital b. technology c. labor d. loanable funds
If the price index is 100 this year, then:
a. there has been no inflation during the year b. the price level is thrice as it was in the base year. c. the price level is one hundred times what it was in the base year. d. the price level is double what it was in the base year. e. the inflation rate has been 100 percent since the base year.