There are limits to the ability of monetary authorities to use sterilized intervention in the case of a surplus because
A. the central bank's ability to constantly obtain foreign currency for the sterilized intervention is constrained.
B. the central bank may be unwilling to increase its holdings of domestic currency.
C. foreign countries will increase political pressures on the country to allow its currency to appreciate.
D. the export level is fixed and it cannot be allowed to drop.
Answer: C
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In the Ricardian model, if a country's trade is restricted, this will cause all EXCEPT which?
A) limited specialization and the division of labor B) reduced volume of trade and reduced gains from trade C) nations to produce inside their production possibilities curves D) a country to produce some of the product of its comparative disadvantage E) raised costs as more diverse product is produced internally
Which of the following is NOT one of the basic questions that an economic system attempts to answer?
A) How to eliminate choices? B) What to produce? C) How will goods and services be produced? D) For whom will goods and services be produced?
Suppose that for a given good demand increases and supply increases at the same time. If demand increases by a lesser amount than supply increases, then equilibrium price __________ and equilibrium quantity __________ for that good
A) rises; falls B) falls; falls C) rises; rises D) falls; rises
Consider the accompanying figure representing the labor market below.
If a minimum wage of $12 per hour is imposed in this labor market, then:
A. 400 workers will earn $12 an hour. B. worker surplus will fall. C. total earnings will rise. D. 200 workers will lose their jobs.