Refer to Table 3.1. If preferences satisfy all four of the basic assumptions:
A) A is on the same indifference curve as B.
B) B is on the same indifference curve as C.
C) A is preferred to C.
D) B is preferred to A.
E) Both A and B answer choices are correct.
D
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Suppose the target exchange rate set by the Fed is 150 yen per dollar. If the demand for dollars permanently decreases, then the Fed
A) can permanently meet the target by selling dollars. B) can permanently meet the target by buying dollars. C) must violate both interest rate parity and purchasing power parity to permanently meet the target. D) cannot permanently maintain the target rate.
The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the Ricardian model is equal to ________ and it ________ as more cloth is produced
A) -MPLF/MPLC; is constant B) -MPLF/MPLC; becomes steeper C) -MPLF/MPLC; becomes flatter D) -MPLC/MPLF; becomes steeper E) -MPLC/MPLF; is constant
In the market for Canadian dollars measured in US dollars, if the price of a US dollar is 1.10 Canadian dollars, a Canadian dollar is
a. 1.10 US dollars b. 1 US dollar c. 0.91 cents US d. 0.99 cents US
With the value of money on the vertical axis, the money supply curve is
a. upward sloping because people supply a larger quantity of money when the value of money increases. b. downward sloping because people supply a larger quantity of money when the value of money decreases. c. horizontal because we assume the central bank controls the money supply d. vertical because we assume the central bank controls the money supply.