In the US a candy bar costs 50 cents. The nominal exchange rate is 6 Chinese yuan per dollar. If the real exchange rate is 0.60, what is the price of a candy bar in China ()
A. 7.2 yuan
B. 6 yuan
C. 5 yuan
D. 3.6 yuan
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The quantity of dollars demanded and supplied in the foreign-currency exchange market depends on ()
A. the real exchange rate and the real interest rate respectively.
B. the real interest rate and the real exchange rate respectively.
C. the real exchange rate.
D. the real interest rate.
If the real exchange rate for the dollar is above the equilibrium level, the quantity of dollars supplied in the foreign-currency exchange market is ()
A. greater than the quantity demanded and the dollar will appreciate.
B. greater than the quantity demanded and the dollar will depreciate.
C. less than the quantity demanded and the dollar will appreciate.
D. less than the quantity demanded and the dollar will depreciate.
If the US government imposes an import quota on French wine, US net exports will ()
A. increase, the real exchange rate of the dollar will appreciate, and domestic sales of US wine will increase.
B. not change, the real exchange rate of the dollar will appreciate, and domestic sales of US wine will increase.
C. not change, the dollar will depreciate, and domestic sales of US wine will not change.
D. None of the above is correct.
Suppose that the government of Jordan raises its budget deficit. The real exchange rate of the Jordanian dinar ()
A. depreciates and Jordanian net exports would rise.
B. depreciates and Jordanian net exports would fall.
C. appreciates and Jordanian net exports rise.
D. appreciates and Jordanian net exports fall.