Assume that the nominal exchange rate increases by 2%. If prices (both domestic and foreign do not change), we know that
A) domestic goods are now relatively cheaper.
B) domestic goods are now relatively more expensive.
C) foreign goods are now relatively cheaper.
D) both B and C
D
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In the United States, bank reserves include:
A) vault cash, currency held by the public and bank's holdings on deposit at the Federal Reserve Bank. B) currency held by the public and bank's holdings on deposit at the Federal Reserve Bank. C) vault cash and the bank's holdings on deposit at the Federal Reserve Bank. D) vault cash and the currency held by the public.
A strategy called "limit pricing" sets the price
A) below the competitive level. B) at the monopoly level. C) at the lowest level that inflicts a loss on the entrant. D) at the highest level that inflicts a loss on the entrant.