If prices in Mexico rise at a higher rate than prices in the U.S., then according to purchasing-power parity the U.S. nominal exchange rate with Mexico should rise
a. True
b. False
Indicate whether the statement is true or false
True
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If an industry is a natural monopoly and regulators decide that the firm must price at marginal cost, then consumers will be ________ off than if the firm was unregulated and the firm's owners will be ________ off than if it was unregulated
A) better; better B) better; worse C) worse; better D) worse; worse
Assume a country is required by law to balance the budget every year. Suppose aggregate demand falls, causing a recession and a budget deficit
To balance the budget, what would the government need to do with the level of government spending and taxes? How would these changes in government spending and taxes affect aggregate demand and the economy?
An activist policy to promote high employment ________
A) could lead to inflationary pressures from an ensuing temporary negative supply shock B) might incentivize workers to push for higher wages beyond what productivity gains can justify C) could lead to inflationary pressures from an ensuing increase in aggregate demand D) all of the above E) none of the above
Given the data in the above table, the marginal revenue curve
A) lies below the demand curve. B) lies above the demand curve. C) intersects the demand curve. D) is equal to the demand curve.