According to the table above, would there be trade flows in both directions if the exchange rate were $1 = 1 peso?
What will be an ideal response?
At this exchange rate the trade flows would only be in one direction. Residents of Mexico would wish to purchase both paper and plastics from the United States. The reason is that in Mexico Paper is three times as expensive and plastics are twice as expensive at prevailing exchange rates.
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In the above figure, the output of an oligopoly will range between
A) 0 and Q1. B) Q1 and Q2. C) Q1 and Q3. D) Q2 and Q3. E) 0 and Q2.
If the economy is experiencing inflation, then the most appropriate government policy would be to:
a. shift the aggregate demand curve by using a tax increase coupled with spending cuts. b. shift the aggregate demand curve by using a tax increase coupled with more spending. c. shift the aggregate demand curve by using a tax cut coupled with spending cuts. d. shift the aggregate demand curve by using a tax cut coupled with more spending. e. shift the aggregate supply curve by using a tax cut coupled with spending cuts.
Which of the following is a linear demand function?
A. Qxd = ?0 + ?XPX2 + ?YPY2 + ?MM2 + ?MH2. B. Qxd = ?PX?X PY?Y M?M H?H. C. Qxd = ? + ?X log PX + ?Y log PY + ?M log M + ?M log H. D. Qxd = ?0 + ?XPX + ?YPY + ?MM + ?HH.
The term productive efficiency refers to:
A. any short-run equilibrium position of a competitive firm. B. the production of the product mix most desired by consumers. C. the production of a good at the lowest average total cost. D. fulfilling the condition P = MC.