Some claim that the long and agonizing periods of speculation preceding exchange rate realignments would
A) not occur under fixed exchange rate regime.
B) not occur under floating.
C) become more severe under currency board.
D) become less severe under floating.
E) be prolonged under floating.
D
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Assume that the Fed has a target inflation rate of 2% and that the values for how much the nominal target federal funds rate responds to a deviation of inflation from its target, g, and how much the nominal target federal funds rate responds to real
GDP, h, are both 0.5. According to the Taylor rule, if inflation increases by 6%, the real interest rate will increase by A) 3%. B) 4%. C) 6%. D) 9%.
Scarcity is illustrated graphically by a production possibilities frontier.
Answer the following statement true (T) or false (F)
Define the following terms and explain their importance to the study of economics
a. public good b. externality c. irreversible decision d. moral hazard e. rent seeking
Answer the following statement(s) true (T) or false (F)
1. Proposals have been submitted to phase down HFCs, a CFC substitute, because they are greenhouse gases contributing to climate change. 2. The “greenhouse effect” is a natural phenomenon. 3. Climate change and global warming are exactly the same phenomenon. 4. Oceans and forests act as natural carbon sinks, which can absorb the anthropogenic releases of CO2. 5. Scientific evidence supports the assertion that human activity is adding to the accumulation of greenhouse gases and therefore contributing to global warming.