In behavioral economics, salience is best exemplified by
A) consumers responding differently when posted prices increase rather than when prices increase because of sales tax increases.
B) consumers responding the same regardless of how prices change.
C) the end of a controlled experiment.
D) consumers responding differently when income increases permanently rather than temporarily.
A
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The real, bilateral exchange rate is the:
a. Weighted-average value of a currency relative to many foreign currencies. b. Value of one currency in terms of another currency. c. Nominal, bilateral exchange rate adjusted for the international price levels of the two countries. d. Nominal, effective exchange rate adjusted for a nation's price level relative to many foreign countries' prices.
In what context does the use of real exchange rates make the most sense?
a. For determining if one nation's real GDP has increased faster than another nation's real GDP. b. For determining if one nation's nominal GDP has increased faster than another nation's nominal GDP. c. For calculating whether to purchase foreign or domestic stocks and bonds. d. For determining changes in a nation's relative international competitiveness. e. For calculating the cost of buying foreign goods and services.