A fixed exchange rate is enforced by
a. national governments, who establish appropriate trade barriers for each country with whom they trade
b. national governments, who manipulate gold reserves appropriately
c. central banks, who buy and sell appropriate currencies
d. the International Monetary Fund, which offers loans to appropriate countries
e. local governments, who manipulate capital reserves appropriately
C
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A U.S. company is attempting to cut costs by shifting some of its services to Thailand. This process of shifting production of products or services overseas to cut costs often results in
A) lower production quantities of those products or services. B) lower consumer prices on those products or services. C) greater potential for market failure for those products and services. D) greater economic uncertainty in the market for those products and services.
The marginal cost is an important piece of information for firms and economists to know because it
a. determines the size of the plant you should build b. is the only cost that increases as production increases c. helps determine precisely which production level maximizes profit d. incorporates fixed costs into the production decision e. is a measure of labor productivity
Which of the following will lower interest rates in the short run?
a. an increase in reserve requirements b. open market sales by the Fed c. a decrease in real GDP d. an increase in the price level
Using the standard 45° line diagram, how does a decrease in investment spending effect the expenditure schedule?
A. It increases the slope of the expenditure schedule. B. It decreases the slope of the expenditure schedule. C. It shifts the expenditure schedule downward. D. It shifts the expenditure schedule upward.