Under a system of fixed exchange rates, what will happen if the price of a currency is set above market equilibrium? How can this be remedied?
A nation whose currency is overvalued will consistently import more than it exports, leading to a loss of currency reserves. To prevent this, the country can devalue its currency, adopt tariffs and quotas, or follow restrictive macroeconomic policy to promote deflation and higher interest rates.
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Efficiency in a market occurs when the production of the good is such that
A) marginal benefit exceeds marginal cost. B) marginal benefit equals marginal cost. C) marginal benefit is lower than marginal cost. D) the marginal cost stops increasing. E) marginal benefit exceeds marginal cost by the maximum amount possible.
A slowdown in labor productivity causes a slowdown in economic growth when all else is held constant
Indicate whether the statement is true or false
Ceteris paribus means
A) "all variables are independent." B) "other things being equal." C) "some assumptions must be accepted without proof." D) "some theories are not rational."
Which of the following would most likely NOT be taught in a macroeconomics course?
A) price changes in the world's oil markets B) factors leading to different economic growth rates among countries C) government actions in response to a slowdown in the economy D) the relationship between the inflation rate and the unemployment rate