A bowed outward production possibilities curve occurs when
A. resources are not scarce.
B. additional units of output of one good necessitate greater reductions in the other good.
C. there are surpluses in the goods being produced.
D. opportunity costs are constant.
Answer: B
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Holding all else constant, an increase in the real interest rate on U.S. assets will ________ the demand for dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. increase; increase B. decrease; decrease C. increase; decrease D. decrease; increase
Explain the effect on the demand for dollars in the foreign exchange market of an increase in the U.S. interest rate differential
What will be an ideal response?
If a monopolist's marginal revenue is $25 a unit and its marginal cost is $25, then
A) to maximize profit the firm should decrease output. B) to maximize profit the firm should continue to produce the output it is producing. C) to maximize profit the firm should increase output. D) Not enough information is given to say what the firm should do to maximize profit.
In response to an unanticipated easing of monetary policy, the price level ________ at first, then ________ after a year
A) rises; returns most of the way to its original value B) falls; returns most of the way to its original value C) remains roughly unchanged; begins to rise D) remains roughly unchanged; begins to fall