Exchange rate interventions occur when a government:
a. buys and sells its own currency on forex markets.
b. buys and sells other currencies on forex markets.
c. increases its interest rate.
d. buys and sells its own currency and other currencies on forex markets.
Ans: d. buys and sells its own currency and other currencies on forex markets.
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The price system works in an economy on a day-to-day basis to match the desires of consumers with the output from producers
Indicate whether the statement is true or false
The profit-maximizing monopolist will operate in a price range over which
A) demand is elastic. B) demand is inelastic. C) the price elasticity of demand is less than 1. D) supply is elastic.
The demand for labor and other factors of production typically decline in a recession because those factors
A. Are derived from the demand for final output, which also declines in a recession. B. Are no longer offered for sale in factor markets. C. Have become more expensive than before the recession. D. Have become relatively scarcer than before the recession.
If velocity remains constant, there are three possible scenarios for the quantity theory of money and prices. Give an example for each of these scenarios.
What will be an ideal response?