One lesson policymakers have learned, and which was evident from Japan's experience in 2002, is:
A. an intervention in the foreign exchange market is almost always effective if done on a regular basis.
B. in order for foreign exchange interventions to work, they must be frequent and expected.
C. an intervention in the foreign exchange market will not work unless accompanied by a change in the policy interest rate.
D. for an intervention in the foreign exchange market to work, the interest rate must be held constant by the central bank.
Answer: C
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Dan is the owner of a price-taking company that manufactures sporting goods. One particular facility Dan owns produces baseball bats and baseball gloves. His cost function for baseball bats is CB(QB, QG) = 100QB + QB2 + QBQG and the marginal cost is MCB = 100 + 2QB + QG, where QB is the output level for bats and QG is the output level for gloves. Dan's cost function for baseball gloves is CG(QB, QG) = 50QG + QG2 + QGQB, and the marginal cost is MCG = 50 + 2QG + QB. The price of a baseball bat is $240 and the price of a baseball glove is $150. What is Dan's total profit assuming he is producing both products at their profit-maximizing sales quantities?
A. $3,600 B. $4,000 C. $4,400 D. $4,500
Table 36-2 ? Domestic ? ? ? GDP Expenditure ? Exports Imports Total Expenditures (Y) C+ I + G (X) (IM) C+ I + G + (X?IM) $2,500 $3,100 $650 $250 _____ 3,000 3,400 650 300 _____ 3,500 3,700 650 350 _____ 4,000 4,000 650 400 _____ 4,500 4,300 650 450 _____ 5,000 4,600 650 500 _____ 5,500 4,900 650 550 _____ In Table 36-2, what is equilibrium GDP?
A. $2,500 B. $3,500 C. $4,500 D. $5,500
Employers may choose to pay their workers a wage that exceeds the equilibrium wage according to
a. efficiency-wage theories. b. equilibrium wage theories. c. screening theories. d. signaling theories.
Fiscal policy occurs when:
A. the government changes its plan for spending and taxing. B. the Federal Reserve makes changes to the federal budget. C. the government changes its plan for the money supply. D. the government raises or lowers nominal interest rates.