The demand for the Franconian franc in the foreign exchange market equals 14,000 - 3,000e and the supply of francs in the foreign exchange market equals 2,000 + 2,000e, where e is the nominal exchange rate expressed in U.S. dollars per franc. If the franc is fixed at 2 U.S. dollars per franc, then to maintain this fixed rate Franconia's international reserves must:
A. decrease by 4,000 dollars per period.
B. increase by 4,000 dollars per period.
C. decrease by 2,000 dollars per period.
D. increase by 2,000 dollars per period.
Answer: B
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Externalities exist because
A) private costs differ from social costs. B) private costs are equal to social costs. C) government has created them. D) they are a function of socialism.
Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table shows the reservation prices of the eight students enrolled in the class. CustomerReservation Price($/Book)Q60R54S48T42U36V30W24X18If Campus Books is permitted to charge 2 prices, and the bookstore knows customers with a reservation price above $30 never bother with coupons, whereas those with a reservation price of $30 or less always use them, then the bookstore will set the list price of the book to be ________ and the discounted price of the book to be ________.
A. $30; $24 B. $30; $18. C. $36; $30 D. $36; $24
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.
When government agents are sent as actors into a bank to test whether loans are more likely to be granted to whites than blacks, they are using a statistical technique called
A. regression. B. standard deviating. C. quadratification. D. auditing.