Which of the following events will cause the largest real depreciation for the domestic economy?
A) a 6% reduction in E and a 6% increase in the foreign price level (P)
B) a 6% increase in the domestic price level (P) and a 6% reduction in P
C) a 6% reduction in E and a 6% reduction in P
D) a 3% increase in E
E) a 2% increase in E and a 2% increase in P
C
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Other things remaining the same, which of the following is likely to increase both the wage rate and the number of workers hired in a steel-producing factory?
A) An increase in the opportunity cost of leisure B) A decrease in the opportunity cost of leisure C) The introduction of labor-saving technology in the factory D) The introduction of labor-complementary technology in the factory
Refer to the above table. The capital account balance is
A) 0. B) -$260. C) -$200. D) -$155.
Adverse selection can occur if:
a. high-risk persons insure themselves more heavily than low-risk persons. b. high-risk persons claim coverage which cannot be borne by the insurers. c. high-risk persons do not conceal information from the insurer. d. high-risk persons make an effort to take less risk in the presence of an insurance cover.
Horizontal equity in taxation refers to the idea that people
a. in unequal conditions should be treated differently. b. in equal conditions should pay equal taxes. c. should be taxed according to their ability to pay. d. should receive government benefits according to how much they have been taxed.