Refer to Figure 19-4. The equilibrium exchange rate is originally at A, $3/pound. Suppose the British government pegs its currency at $4/pound
Speculators expect that the value of the pound will drop and this shifts the demand curve for pounds to D2. If the government abandons the peg, the equilibrium exchange rate would be
A) $4/pound. B) $3/pound.
C) $2/pound. D) less than $2/pound.
C
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Consumers in a country buy only two goods, pens and CDs. The prices and quantities purchased by urban households are in the table above. The reference base year is 2011. If the current year is 2012, the cost of the CPI market basket in 2012 is
A) $3,400. B) $3,508. C) $3,580. D) $3,500. E) $3,588.
A person who quits working because of a variety of excuses such as "unbearable office politics" or "difficulty to work in that environment" is described as being part of
a. discouraged workers b. counterfeit unemployment c. the underemployed d. displaced unemployment e. frictional unemployment