If the U.S. dollar is pegged to gold, then
A) the Federal Reserve must adjust the supply of U.S. dollars when the price of gold changes.
B) the government must buy and sell gold reserves when the price of the dollar changes.
C) the U.S. dollar will not change in value since the price of gold is constant.
D) the U.S. dollar would become more valuable than the Euro.
A
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If capital per hour of labor increases, real GDP per hour of labor
A) decreases for a given level of technology. B) increases because the level of technology increases. C) increases for a given level of technology. D) decreases because the level of technology decreases.
If the U.S. dollar and British pound have a flexible exchange rate, and the U.S. dollar changes so that one needs more dollars to buy one pound, the currency has
A) depreciated. B) appreciated. C) devalued. D) revalued.
Since the late 1970s which of the following groups has become worse off?
a. Highly-skilled workers b. Technical workers c. Less-skilled workers d. Scientists and other workers who require a lot of education e. All types of workers
"The operator of the tunnel that links Britain and France, Eurotunnel, said that commercial and tourist traffic using its car and coach shuttle service had fallen sharply in 2004, leading to a drop in operating revenues of 4%. Eurotunnel's chief executive, Jean-Louis Raymond, blamed cut-throat competition from budget airlines." (news story, January 2005)
a. If Mr. Raymond is correct, are the services of airlines and Eurotunnel substitutes or complements? b. Use demand and supply analysis to explain how lower airfares between Paris and London impact the market for the shuttle services of Eurotunnel.