Which system is the most difficult to maintain if you are running a trade deficit?
A. The free market exchange rate system
B. The managed float exchange rate system
C. The fixed exchange rate system
D. The floating exchange rate system
Answer: C
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Any target value of the nominal interest rate chosen by the Federal Reserve implies a specific value for ________.
A. potential output B. the budget deficit C. government purchases D. the money supply
The more inelastic the consumer demand for the final product, the
A) greater will be the economic profit in a competitive market. B) greater the impact on employment from a change in the wage rate. C) more inelastic the demand for labor producing the product. D) more responsive the output demand to a change in the price of labor.
In order to maximize profits, a firm should produce at the output level for which
a. average cost is minimized. b. marginal revenue equals marginal cost. c. marginal cost is minimized. d. price minus average cost is as large as possible.
If the aggregate demand curve shifts to the left in the short run then the long-run equilibrium will be at a:
A. higher price level and higher level of output. B. higher price level and lower level of output. C. lower price level and same level of output. D. lower price level and lower level of output.