Assume that Country X and Country Y are trading partners and the exchange rates are fixed. If prices in Country Y fall, which of the following is expected to happen?
a. Country X will export more.
b. Economy of Country X will be depressed.
c. Net exports will rise for Country X.
d. Country Y will import more.
b
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A firm that is earning zero economic profit should go out of business.
Answer the following statement true (T) or false (F)
A statement of opinion about which policy is best for America is
a. an abstraction b. a positive statement c. a normative statement d. a philosophical conundrum e. empirically verifiable
Proponents of Fed independence maintain that
a. independence helps ensure low unemployment rates. b. money is too important to be left to the bankers. c. independence permits objective decisions not based on politics. d. only the Federal Reserve knows how to act wisely.
Macroeconomists are concerned with each of the following issues EXCEPT:
A. Why do the prices of computers increase more slowly than the price of gasoline? B. What are the costs of inflation? C. Why does inflation vary over time? D. Why does inflation vary across countries?