Q1. You manage a department in a large corporation. 2 years ago you had 20 workers and produced 40000 units. The company allocated 10 more workers to your department last year and output increased to 45000. You just received a memo from your boss indicating which he is very concerned about the 500 unit fall in the average productivity of your workers. Explain how can you defend yourself?
Q2. The cost of a basket of goods and services in the U. S. is $600. In Canada the same basket of goods cost 700 Canadian dollars. If the nominal exchange rate were 1.2 Canadian dollars per U. S. dollar, illustrate what would be the real exchange rate?