Holding all else constant, a decrease in the real interest rate on Mexican assets will ________ the supply of dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. increase; decrease
B. decrease; increase
C. increase; increase
D. decrease; decrease
Answer: B
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The belief that government spending is necessary to offset sluggish private investment demand is associated with:
a. monetarism. b. supply-side economics. c. Keynesianism. d. rational expectations theory.
Which of the following is an argument made in support of tariffs and import quotas?
a. protecting infant industries b. promoting national defense c. preventing product dumping d. all of the above
If a market basket of goods cost $100 in the base year and $110 in a later year, then average prices have increased by:
A. 110 percent. B. 100 percent. C. 90 percent. D. 10 percent.
A monopolistic firm will shut down if
A) P < ATC for every level of output. B) P > ATC for every level of output. C) P > AVC for every level of output. D) P < AVC for every level of output.