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Author Question: Which of the following, all else fixed, will cause the real exchange rate to decrease? A) a ... (Read 32 times)

bobbysung

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on: Jun 30, 2018
Which of the following, all else fixed, will cause the real exchange rate to decrease?
 
  A) a nominal appreciation
  B) an increase in the foreign price level
  C) an increase in the domestic price level
  D) all of the above
  E) none of the above

Question 2

Explain how a reduction in the unemployment rate will affect bargaining power and nominal wages.
 
  What will be an ideal response?


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ryansturges

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Reply #1 on: Jun 30, 2018
Answer to Question 1

B

Answer to Question 2

As the unemployment rate decreases, it is easier for individuals to find employment at other firms. So, workers' bargaining power will increase. As bargaining power increases, the nominal wage will increase.


bobbysung

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Reply #2 on: Jun 30, 2018
Correct answers!


ryansturges

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Reply #3 on: Jun 30, 2018
Great! Please up vote :D


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