Under a fixed exchange rate regime, if a country has an ________ exchange rate, then its central bank's attempt to keep its currency from appreciating will result in a ________ of international reserves
A) undervalued; gain
B) undervalued; loss
C) overvalued; gain
D) overvalued; loss
A
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
For a given quantity, the total profit of a perfectly competitive firm is equal to the vertical distance between the firm's total revenue curve and its total cost curve
Indicate whether the statement is true or false
If the government set a price floor at $8
A. there would be a temporary surplus, then prices would fall to equilibrium.
B. there would be a permanent surplus, at least until the price floor was lifted.
C. the price would rise back to the equilibrium price.
D. the price floor would not have any effect on this market.
The idea that nominal variables are heavily influenced by the quantity of money and that money is largely irrelevant for understanding the determinants of real variables is called the
a. velocity concept. b. Fisher effect. c. classical dichotomy. d. Mankiw effect.