In fact, several studies focused on Europe concluded that higher exchange rate volatility:
A) is associated with smaller price differentials.
B) is associated with larger price differentials.
C) often precedes a return to stability.
D) promotes trade and cooperation among nations.
Answer: B) is associated with larger price differentials.
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If the Fed tries to lower the unemployment rate so it is lower than the natural unemployment rate, before the expected inflation rate changes, the inflation rate ________ and the unemployment rate ________
A) does not change; falls B) falls; falls C) rises; does not change D) falls; rises E) rises; falls
A federally funded, state-administered program that pays medical and hospital costs for welfare recipients and other low-income people is
a. Medicare b. federal HMO c. state HMO d. Fedicare e. Medicaid
Following mergers that raised the market shares of two airlines to 79 and 82 percent, respectively, of traffic in their hub cities, prices of service rose and the quantities of service fell, even though in most other markets, prices fell and quantities increased. The result suggests thatÂ
A. these markets were contestable. B. there was evidence of market power. C. oligopoly firms bought out their competitors. D. the market had no barriers to entry.
Higher interest rates will, all else equal:
A. increase the extraction cost of a resource. B. increase the user cost of extracting a resource. C. reduce the user cost of extracting a resource. D. have no impact on either the user cost or extraction cost of a resource.