Please state whether you agree or disagree with the following statement, and why: "An increase in the price level of a country, relative to another country's price level, will cause its currency to appreciate."
What will be an ideal response?
Disagree. An increase in the price level of one country relative to another will cause that country's currency to depreciate. As the text points out, countries with relatively high rates of inflation experience relatively high rates of currency depreciation.
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One way to achieve efficiency in a market with a negative externality is
a. to raise the market demand curve to the position of the marginal social cost curve b. to apply the Coase theorem c. to lower the marginal social cost curve to the position of the market supply curve d. to eliminate all side payments e. to raise the market supply curve to the position of the marginal social cost curve
Buchanan and Wagner assert that there is a political bias toward contractionary fiscal policy and not expansionary fiscal policy
Indicate whether the statement is true or false
The harmful effect of a price floor to ________ is ________.
A. consumers; the floor creates a shortage of the product B. producers; the selling price of the product is below the equilibrium price C. consumers; the selling price of the product is below the equilibrium price D. producers; the floor creates a surplus of the product
The Annual Reports of the Trustees of the Medicare Trust Fund are based upon projections of
A. wages and interest rates. B. wages and interest rates, along with fertility rates and life expectancies. C. fertility rates and life expectancies. D. federal budget deficits and trade deficits.