If the Fed is using policy to combat inflation, what is likely to happen in the foreign exchange market and to the foreign exchange value of the dollar?
A) The demand for the dollar will increase and the foreign exchange value of the dollar will rise.
B) The demand for the dollar will decrease and the foreign exchange value of the dollar will fall.
C) The demand for the dollar will decrease and the foreign exchange value of the dollar will rise.
D) The demand for the dollar will increase and the foreign exchange value of the dollar will fall.
A
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In the long run when average total cost does not depend on the quantity of output, this is called:
A. economies of scale. B. diseconomies of scale. C. constant economies to scale. D. minimum average total cost.
Which of the following is a positive statement?
a. I think we should pass a constitutional amendment to reduce the deficit. b. President Clinton's way of dealing with the economy is better than President Bush's. c. I hope interest rates come down soon. d. If taxes are raised, unemployment will drop.
Assume that the marginal propensity to consume equals 0.75 and the marginal propensity to import equals 0.10 . By how much does spending on domestic goods increase if income increases by $300?
a. $195 b. $225 c. $30 d. $300 e. $75
Macland’s Power company is a natural monopoly. Its regulators have given Macland’s Power the price it can charge for the next five years with the fourth and fifth year’s price declining by 5%. After five years, Macland can renegotiate the price. What method are the regulators using to control this natural monopoly?
a. Cost plus regulation b. Price equals average total cost regulation c. Price cap regulation d. Cost elasticity mark up