What were the reasons for selecting the U.S. dollar as the currency to which the other 43 countries agreed to peg their currencies as part of the Bretton Woods System?
What will be an ideal response?
There are probably three main reasons for selecting the U.S. dollar. First, of the victors from World War II, the United States was the largest both economically as well as militarily. Second, there were a lot of dollars available and this was crucial. If the Bretton Woods System were going to work, each participating country would have to hold substantial dollar reserves. Finally, the U.S. was the only industrialized country at that time whose capital stock was not decimated by the war.
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If a firm supplies 200 units at a price of $50 and 100 units at a price of $40, using the midpoint method, what is the price elasticity of supply?
A) 0.33 B) 1.00 C) 3.00 D) 5.00 E) 8.50
If the marginal rate of technical substitution for a cost minimizing firm is 10, and the wage rate for labor is $5, what is the rental rate for capital?
A) $0.5 B) $1 C) $2 D) $10
In the presence of a negative externality, a specific tax can achieve the social optimum because
A) output is reduced to zero as a result. B) it internalizes the external cost. C) it directly charges the producer for polluting. D) the price of the good rises by the full amount of the tax.
Which one of the following government actions is intended to generate positive externalities?
A. Subsidies for planting trees on hillsides B. Requiring autos to meet minimum emissions regulations C. Speed limits on the highways D. Taxing polluting industries