If Honda (a Japan-based firm) produces a car in Ohio and exports it to Japan, in which country's GDP will the car be counted?
a. Japan's, because Honda is a Japanese company
b. Japan's because that is where the car is purchased
c. The GDP of the United States because that is where it was built
d. Both Japan and the United States
C
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In the market for widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for widgets is 200 per month when there is no tax. Then a tax of $5 per widget is imposed. As a result, the government is able to raise $800 per month in tax revenue. We can conclude that the equilibrium
quantity of widgets has fallen by a. 40 per month. b. 50 per month. c. 75 per month. d. 100 per month.
Can the U.S. dollar and the European euro both appreciate relative to each other?
A. Yes, both countries can gain in this manner. B. Yes, provided the central banks permit it. C. No, unless there is a system of fixed exchange rates. D. No, if one currency appreciates, the other must depreciate.