The currency value of Agraria is set by government decree. Which of the following happens when the government alters the exchange rate so that its currency can buy more units of foreign currency?
a. Reflation
b. Devaluation
c. Appreciation
d. Revaluation
d
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To improve package delivery, one change UPS made involved taking better account of weather forecasts to avoid delays in flying packages. This is an example of
A) positive technological change. B) diseconomies of scale. C) increasing marginal returns. D) a reduction in fixed costs.
In which of the following situations would you prefer to be the borrower?
A) The interest rate is 9 percent and the expected inflation rate is 7 percent. B) The interest rate is 4 percent and the expected inflation rate is 1 percent. C) The interest rate is 13 percent and the expected inflation rate is 15 percent. D) The interest rate is 25 percent and the expected inflation rate is 50 percent.
If workers expect inflation, and tend to overestimate actual inflation when they negotiate wage increases, the result will be a continuing
a. shift of AD to the left. b. shift of AD to the right. c. recessionary gap. d. inflationary gap.
If you were trying to explain and predict someone’s behavior, economists would say you should find out ______.
a. what their incentives are b. how much money they make c. where they went to school d. who their relatives are