The opportunity cost of producing a bicycle refers to
a. the out-of-pocket payments made to produce the bicycle.
b. the value of the goods that were given up to produce the bicycle.
c. the bicycle's retail price.
d. the marginal cost of the last bicycle produced.
b
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The real rate of interest equals the
a. money rate of interest minus the expected inflation rate. b. money rate of interest plus the expected inflation rate. c. inflationary premium. d. nominal rate of interest.
Which of the following is true?
A. If capital is highly mobile, fiscal policy then loses its effectiveness under a fixed exchange rate. B. Fixed exchange rates encourage countries to have different goals, priorities, and policies with respect to macroeconomic variables. C. Countries that want to have a fixed exchange-rate regime should be willing to refrain from policy changes that lead to large international capital flows. D. For a floating exchange rate to work for a country, it cannot have an inflation rate that is much above the inflation rate(s) of its primary trading partners.
If eight lemons (low quality) and two plums (high quality) are supplied and buyers assume that there is a 40% chance of getting a lemon, there is an equilibrium.
Answer the following statement true (T) or false (F)
The demand for Canadian cheese by a U.S. store is also a
A) demand for Canadian dollars. B) demand for SDRs. C) supply of U.S. dollars. D) supply of Canadian dollars.