Under a pure gold standard
A) the dollar is tied to gold and all other currencies are fixed relative to the dollar.
B) all foreign exchanges involve gold for goods and services.
C) all currencies are defined in terms of gold and these rates are fixed.
D) all trade involves government agencies.
Answer: C
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Prices that adjust slowly to their long-run equilibrium ________
A) help the economy to avoid economic fluctuations B) call for policies that focus on short-run fluctuations C) are conducive to maintaining low inflation D) all of the above E) none of the above
Under what circumstances will the residual supply curve for a country be upward sloping?
A) when it does not import any of the good from the rest of the world B) when it imports a small portion of the rest of the world's supply of the good C) when it imports a large portion of the rest of the world's supply of the good D) Either A or B
Assume a firm is a monopoly and enjoys $10,000,000 profits per year. The firm lobbies to have a moratorium passed by Congress on new firms in its market for the next 25 years
If there is no discount rate, how much would any firm(s) arguing against the moratorium be willing to spend to block it? A) something less than $250 million B) $250 million C) $251 million D) $250 billion
When equilibrium real GDP falls short of potential GDP, there is a(n)
a. inflationary gap. b. potential gap. c. recessionary gap. d. precautionary gap.