If the exchange rate is 0.80 British pounds per $1, a bottle of pop that costs 6 pounds in Great Britain costs, in the U.S.,

Suppose an economy produces only ice cream cones. If the price level rises, the value of currency

Suppose that real interest rates in the U.S. rise relative to real interest rates in other countries.  This increase would make foreigners

If the price level increased from 120 to 126, then what was the inflation rate?

Tristan decides to purchase bonds issued by India instead of ones issued by the Brazil even though the Indian bonds have a higher risk of default. An economic reason for his decision might be that

Jory is visiting Turkey, where she notices that prices are posted in Türk lirası (the Turkish monetary unit). This best illustrates money’s function as

If a country experiences a trade deficit, then

Figure 2. On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes.   Refer to figure 2. At the end of 2050 the relevant money-supply curve was the one labeled MS1.  At the end of 2051 the relevant money-supply curve was the one labeled MS2. Assuming the economy is always in equilibrium, what was the economy’s approximate inflation rate for 2051?

The Fisher effect

Barbados has exports of $31.5 million and imports of $30 million.  Barbados