Under a floating exchange-rate regime with a low degree of capital mobility, a change in the exchange-rate value of domestic currency following expansionary fiscal policy will tend to
A. cause a deficit in the financial account.
B. decrease the country's holdings of official reserve assets.
C. deteriorate the current account.
D. give a trade-based stimulus to domestic production.
Answer: D
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Assume a firm has the following cost and revenue characteristics at its current level of output: price=$10.00 . average variable cost=$8.00 and average fixed cost =$4.00 . This firm is
a. incurring a loss of $2.00 per unit and should shut down. b. realizing only a normal profit. c. realizing an economic profit of $2.00 per unit. d. incurring a loss per unit of $2.00 . but should continue to operate in the short run.
Surpluses cause prices to rise while shortages cause prices to fall
a. True b. False Indicate whether the statement is true or false
If the U.S. government starts to sell off its stockpile of cheese,
A. consumers will be less willing to purchase cheese. B. the equilibrium quantity demanded will rise. C. farmers will hoard the cheese they produce. D. the quantity of cheese that spoils before sale will rise.
GDP equals the value added by producers of:
A. intermediate goods and services, as well as final goods and services. B. intermediate goods and services only. C. final goods and services only. D. intermediate and final goods only.