A country facing a balance of payments deficit will change the pegged value of its currency; this is called a revaluation
Indicate whether the statement is true or false
FALSE
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There is some debate about whether secondary benefits should be considered when assessing public policy proposals. Identify two reasons why secondary benefits might be excluded from a benefit-cost analysis of proposed environmental policy.
What will be an ideal response?
Capital controls are most often aimed at slowing or eliminating movements of
A) reserve assets. B) foreign direct investment. C) foreign portfolio investment. D) nonreserve government assets. E) None of the above.
The average cost of production at the profit maximizing output level for Jones Inc, is $4 per unit. The average variable cost of production is $3.5 per unit at this output level. The introduction of cheaper substitutes reduces the demand drastically and the market price falls to $1.5 per unit. If the minimum average variable cost the firm must incur is $2.5, identify the correct statement from
the following. a. There are output levels where revenue exceeds variable cost when the price is $1.5 per unit. b. The firm will continue to operate in the short run. c. The firm will breakeven at the price of $1.5 per unit. d. The firm will shut down.
As part of recent cutbacks, Paul just accepted a 10% cut in pay. Now he brews coffee at home instead of stopping at Starbucks every day. Based on this behavior, we can say home-brewed coffee:
A. and Starbucks coffee are -normal goods for Paul. B. will become a normal good for Paul over time. C. is an inferior good, while Starbucks coffee is a normal good for Paul. D. is a normal good, and Starbucks coffee is an inferior good for Paul.