When a fixed exchange rate system is adopted, it results in all of the following except:
A) reduced uncertainty about exchange rate.
B) decreased volatility in prices.
C) increased volume of trade.
D) decreased volume of trade.
Ans: D) decreased volume of trade.
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The marginal rate of technical substitution is
A) the rate at which a firm is able to institute positive technological changes to its production process. B) the rate at which a firm is able to increase its output by replacing labor with technology. C) the rate at which a firm is able to substitute one input for another, while keeping the level of output constant. D) the rate at which a firm is able to substitute one input for another, while keeping total cost constant.
Which of the following statements best describes the reaction of the private sector to government budget deficits and surpluses?
a. In practice, the private sector only sometimes adjusts its savings behavior to offset government budget deficits and surpluses. b. In practice, the private sector only partially adjusts its savings behavior to offset government budget deficits and surpluses. c. In practice, the private sector only sometimes and partially adjusts its savings behavior to offset government budget deficits and surpluses. d. In practice, the private sector does not adjust its savings behavior to offset government budget deficits and surpluses.
Before the breakup of AT&T several years ago, profits on long-distance calls offset losses on basic residential service. This practice is known as
A. abuse of monopolistic power. B. cream skimming. C. cross-subsidization. D. the Ramsey rule.
What are the three main sources of barriers to entry for monopolies?