Under a fixed exchange rate system, the central bank of a country experiencing a balance of payments surplus will:
A) increase the supply of domestic currency to prevent currency depreciation.
B) increase the demand for domestic currency to prevent currency depreciation.
C) increase the supply of domestic currency to prevent a currency appreciation.
D) increase the demand for domestic currency to prevent a currency appreciation.
C
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Which of the following statements about the private production of a public good is true?
a. Private production is not feasible unless government subsidizes it. b. Private production is only possible for pure public goods. c. Private production is always inefficient. d. Private production is provides useful information about consumer preferences.
The portion of the four-sector circular flow model which shows the flow of funds from savers to borrowers is the:
a. product market. b. factor market. c. savings market. d. financial market.
Objections to free trade
a. arise because trade harms everyone b. arise when some groups within a nation are harmed by trade c. arise because importers and exporters are often the same people d. are inconsistent with economic rationality e. arise because people prefer not to consume foreign-produced goods
When new firms are encouraged to enter a monopolistically competitive market
A) some existing firms must be earning economic profits. B) they do so because there is insufficient product differentiation. C) the demand curve facing an existing firm shifts to the right. D) the marginal cost curve facing an existing firm shifts downwards.