If the exchange rate between the dollar and the pound (the pound price of the dollar) is currently 1.50, and is expected to be 1.35 in one year, then the expected rate of
A) depreciation of the dollar is 10.
B) depreciation of the dollar is 15.
C) appreciation of the dollar is 10.
D) appreciation of the dollar is 15.
E) none of the above
Question 2
Efficiency wage theory suggests that
A) workers will be paid less than their reservation wage.
B) productivity might drop if the wage rate is too low.
C) the government can only set tax rates so high before people will prefer not to work.
D) unskilled workers will have a lower turnover rate than skilled workers.
E) firms will be more resistant to wage increases as the labor market tightens.
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