How do the fluctuations in the exchange rate influence the domestic price level?
What will be an ideal response?
When a currency depreciates, the prices of imported inputs will rise. The domestic aggregate supply curve therefore shifts inward, pushing up the prices of domestically made goods and services. By exactly analogous reasoning, an appreciation of the a currency makes imported inputs cheaper and shifts the domestic aggregate supply curve outward, thus pushing domestic prices down.
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In the official labor statistics, discouraged workers are:
a. counted as employed. b. counted as unemployed. c. included in the labor force. d. not included in the labor force. e. considered to be seasonally unemployed.
Which of the following functions is not performed by prices in a free market?
A. Guiding the allocation of resources B. Conveying information about the marginal cost of production C. Making the distribution of income more equitable D. Replacing the need for governmental supervision of production
If exports are being excluded unfairly from a market, the World Trade Organization (WTO) may authorize
A. Quotas. B. Other nontariff barriers. C. Retaliatory comparative advantages. D. Retaliatory tariffs.
Recall the Application about the free-agent market for professional baseball pitchers to answer the following question(s).Recall the Application. Why is there adverse selection in the baseball pitcher free-agent market?
What will be an ideal response?