To complete the theory of exchange rates, a model should be created that:
a. accommodates short-run changes in variables.
b. accommodates long-run changes in variables.
c. accommodates changes in expectations.
d. accommodates short-run and long-run changes in variables and changes in expectations
Ans: d. accommodates short-run and long-run changes in variables and changes in expectations
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In a free market economy, the decisions of buyers and sellers are:
A. coordinated by the government. B. random. C. motivated by custom and tradition. D. guided by prices.
A bottle of wine costs $8 and a quiche costs $5 . At Robert's present levels of consumption, he spends all his income and receives marginal utility of $10 from the last bottle of wine and marginal utility of $4 from the last quiche. To maximize his total utility, Robert should
a. buy less wine and more quiche. b. buy more wine and less quiche. c. spend all of his money on wine. d. change his spending pattern until he buys 8/5ths as much wine as quiche.
Average fixed cost
a. increases as output increases. b. declines as output increases. c. is always zero. d. remains constant even if output increases. e. decreases and then increases as output increases.
A dominant strategy is one where one firm picks
A. a strategy that must be repeated. B. the same strategy as the rival. C. a strategy only after seeing the other firm's decision. D. a strategy no matter what the rival does.