Currency speculators aid international trade by:
A. absorbing exchange rate risk that others do not want to bear.
B. increasing the volatility of exchange rates.
C. making the demand for imports less elastic.
D. promoting barter.
A. absorbing exchange rate risk that others do not want to bear.
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An example of a randomized controlled experiment is when
A) households receive a tax rebate in one year but not the other. B) one U.S. state increases minimum wages and an adjacent state does not, and employment differences are observed. C) random variables are controlled for by holding constant other factors. D) some 5th graders in a specific elementary school are allowed to use computers at school while others are not, and their end-of-year performance is compared holding constant other factors.
Suppose a lottery ticket costs $1 and the probability that a holder will win nothing is 99%. What must the jackpot be for this to be a fair bet?
a. 10 b. 100 c. 1,000 d. 10,000
A monopolistically competitive market is characterized by:
a. many small sellers selling a differentiated product. b. a single seller of a product that has few suitable substitutes. c. very strong barriers to entry. d. mutual interdependence in pricing decisions.
When the economy entered a serious recession in 2008, the response of the U.S. government was to institute a $700 billion bailout plan, pursue other heavy deficit spending, and take on unusually large liabilities through bond and money market fund guarantees. This is an example of:
A. procyclical fiscal policy. B. fiscal policy that employs automatic stabilizers as the primary means of economic stabilization. C. sound finance as fiscal policy. D. functional finance and expansionary fiscal policy.