Q1. Assume that American rice is sold for $100 perbushel, Japanese rice is sold 16,000 yen per bushel, and thenominal exchange rate is 80 yen per dollar. Assume that the nominalexchange rate remains unchanged.

Select one:

a. Buy a bushel of American rice and then sell it inJapan, making a profit of 80,000 yen.

b. Buy a bushel of American rice and then sell it inJapan, making a profit of 100 dollars.

c. Buy a bushel of Japanese rice and then sell it in theUS, making a profit of 100 dollars.

d. The buy and sell process would continue until theprice of American rice rise higher than the that of Japaneserise.

e. The buy and sell process would continue until noprofit can be made

f. A and D

g.B and E

h. C and D

i. C and E

j. None of the above is correct

2. Which of the following would both make a country’sreal exchange rate rise ?

Select one:

a. its budget deficit increases and bonds issued in thecountry become riskier

b. bonds issued in that country become riskier and itimposes an import quota

c. its budget deficit decreases and it imposes an importquota

d. a sudden capital flight

e. None of the above are correct.

3. In the open-economy macroeconomic model, the supplyof loanable funds comes from

Select one:

a. the sum of domestic investment and net capitaloutflow.

b. private saving alone.

c. foreign borrowing alone.

d.Y-C-G.

e. None of the above are correct.

explain plz