Which of the following would cause an increase in quantity of wheat supplied?
A. The price firms pay for liability insurance falls.
B. New, better technology for farming is introduced.
C. The price farmers receive for their wheat rises.
D. The price of fertilizer farmers use in their fields falls.
Answer: C
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In order to assess the relationship between the real exchange rate and total exports for any nation, one must construct a real effective exchange rate that measures:
a. a composite of each trading partner's real exchange rate change weighted by the share of trade. b. the exchange rate that would exist with no inflation and balanced trade. c. the average of all nominal exchange rates since we assume no inflation. d. nominal trade adjusted for inflation.
An expansionary fiscal policy is likely to
A) increase borrowing by the Treasury through the sale of bonds. B) decrease borrowing by the Treasury through the purchase of bonds. C) increase borrowing by the Treasury through the purchase of bonds. D) decrease borrowing by the Treasury through the sale of bonds.