How can nations fix their exchange rates?
a. Either by imposing strict exchange controls or by setting interest rates at the same level as the country with which they want to fix the exchange rate.
b. Either by imposing strict exchange controls or by keeping inflation at the same rate as the country with which they want to fix the exchange rate.
c. Nominal exchange rates cannot be fixed.
d. Either by imposing strict exchange controls or by obligating the central bank to intervene in the foreign exchange market to keep the exchange rate at its chosen rate.
e. Either by keeping inflation at the same rate or by setting interest rates at the same level as the country with which they want to fix the exchange rate.
.D
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If total output increases from $100 billion to $200 billion as population increases from 100 million to 150 million, then output per person:
A. doubles. B. decreases C. increases, but by less than 100 percent. D. remains constant.
The demand for insulin is quite inelastic. The demand for Pepsi is quite elastic. Suppose the elasticity of supply for insulin is the same as the elasticity of supply for Pepsi
If a $0.20 tax was imposed on each of these goods (holding everything else constant), which consumers would pay more of the tax? A) the Pepsi consumers B) the insulin consumers C) There would be no difference in the amount of tax paid by the consumers. D) More information is needed to determine which consumers pay more of the tax. E) The premise of the question is wrong because the elasticity of demand and the incidence of a tax are not related.
Asymmetric information exists when
A. both parties to an exchange have all relevant facts about that exchange. B. a good that is either nonrivalrous or nonexcludable is being sold on a market. C. the two parties to an exchange differ in what they know about the good being exchanged. D. neither party to an exchange is knowledgeable about the quality of the good being exchanged.
The World Trade Organization (WTO)
a. is the successor to GATT b. administers trade agreements and resolves trade disputes c. comprises more than 150 member nations d. all of the above e. (a) and (b) only