This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose that over the past decade, U.S. inflation is greater than that in Mexico. Further assume ... (Read 38 times)

luminitza

  • Hero Member
  • *****
  • Posts: 555
on: Jun 30, 2018
Suppose that over the past decade, U.S. inflation is greater than that in Mexico. Further assume that during this same period, the dollar appreciates relative to the Mexican peso. Given this information,
 
  A) the real exchange rate remains unchanged.
  B) the real exchange rate must decrease.
  C) the real exchange rate must increase.
  D) the real exchange rate can increase or remain the same, but not decrease.
  E) the real exchange rate can decrease or remain the same, but not increase.

Question 2

Explain what effect an increase in the unemployment rate will have on the real wage based on: (1 ) the WS relation; and (2 ) the PS relation.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Hikerman221

  • Sr. Member
  • ****
  • Posts: 346
Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

An increase in the unemployment rate will decrease bargaining power, decrease the nominal wage, and therefore decrease the real wage based on wage setting behavior. Changes in the unemployment rate have no effect on the real wage based on price setting behavior.


luminitza

  • Member
  • Posts: 555
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

TheDev123

  • Member
  • Posts: 332
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

The lipid bilayer is made of phospholipids. They are arranged in a double layer because one of their ends is attracted to water while the other is repelled by water.

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

Did you know?

Of the estimated 2 million heroin users in the United States, 600,000–800,000 are considered hardcore addicts. Heroin addiction is considered to be one of the hardest addictions to recover from.

Did you know?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

Extinction of species in the past. Extinction of species in the past.
Past and Future Use of Aggregate Past and Future Use of Aggregate
Thinking about Past Experiences While Asleep Thinking about Past Experiences While Asleep
American soldiers advance past a burning oil well. As the routed Iraqi army fled Kuwait, it ignited ... American soldiers advance past a burning oil well. As the routed Iraqi army fled Kuwait, it ignited ...
Ana Mendieta, Untitled, 1976. From Silueta Works in Mexico. Ana Mendieta, Untitled, 1976. From Silueta Works in Mexico.
Men who are at risk for heart disease and report work-related stressors are at greater risk of death ... Men who are at risk for heart disease and report work-related stressors are at greater risk of death ...
Video: Gastroesophageal Reflux Disease (GERD)

For a complete list of videos, visit our video library