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Author Question: A decrease in Swiss interest rates will cause A) an increase in the demand for U.S. dollars and ... (Read 35 times)

Chloeellawright

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on: Jun 29, 2018
A decrease in Swiss interest rates will cause
 
  A) an increase in the demand for U.S. dollars and an increase in the exchange rate of Swiss francs per dollar.
  B) a decrease in the demand for U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar.
  C) an increase in the supply of U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar.
  D) a decrease in the supply of U.S. dollars and an increase in the exchange rate of Swiss francs per dollar.

Question 2

Suppose the base reference period is 1982-1984. If your nominal wage rate is 8.00 per hour when the CPI is 180, what is your real wage rate in 1982-1984 dollars?
 
  What will be an ideal response?


guyanai

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Reply #1 on: Jun 29, 2018
Answer to Question 1

D

Answer to Question 2

The real wage rate equals 100 times the nominal wage rate divided by the CPI. Hence the real wage rate equals 100  (8.00)/(180 ) = 4.44.


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