Which of the following can help to explain why higher inflation may lead to currency appreciations?
A) The interest rate is not the prime target of monetary policy.
B) Most central banks adjust their policy interest rates expressly so as to keep inflation in check.
C) Central banks increase the money supply leading to overshooting of the exchange rate.
D) Inflation will increase the purchasing power of a currency.
E) The world market does not adjust their currency trade to reflect inflation.
B
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In the figure above, if pizza production is restricted to 5,000 pizzas a day, the deadweight loss is
A) $45,000 per day. B) $12,500 per day. C) $22,500 per day. D) $90,000 per day. E) zero.
Labor costs $20 per worker and capital costs $100 per unit. Then, according to the above table, which of the following options for pizza production is economically efficient?
A) Option 1 B) Option 3 C) Option 4 D) Both options 1 and 3 are economically efficient.
Which of the following would increase the unemployment rate?
A) an increase in unemployment insurance payments B) a law making it illegal to work more than 35 hours per week C) a cut in unemployment compensation D) a decrease in the minimum wage
The major economic effect of Medicare subsidies is
A. that the number of physicians has decreased since compensation is low. B. to lower the price of medical services and reduce the quantity demanded. C. to increase the price of medical services and increase the quantity demanded. D. to increase the price of medical services and reduce the quantity demanded.