From the perspective of the United States, an increase in the nominal exchange rate will cause which of the following?
A) the dollar becomes less expensive to foreigners
B) foreign goods are more expensive to Americans
C) foreign currency is more expensive to Americans
D) American goods are more expensive to foreigners
E) none of the above
D
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Which of the following is a tool the Federal Reserve System can use to regulate the quantity of money?
i. changing the discount rate ii. conducting open market operations iii. changing the required reserve ratio A) i only B) ii only C) i and ii D) ii and iii E) i, ii, and iii
An individual derives utility from consuming "all other goods," g, and clean air (measured by the reduction in particulate matter per m3), a, as measured by the utility function U(g,a) = g0.6a0.4. The price of consumer goods equals $20 and the price of clean air (abatement) equals $10. What is the slope of the Engel curve when income increases from $100 to $200?
A) The slope is 25. B) The slope is -25. C) The slope is zero. D) The slope is infinite.