The figure below shows an IS-LM-FE model for an economy with fixed exchange rates. Initially the economy is at Point A, a triple intersection. Here, the FE curve is steeper than the LM curve.
To maintain the fixed exchange rate and keep the economy at Point B, the monetary authority must
A. sell foreign currency and sell domestic government bonds.
B. buy foreign currency and sell domestic government bonds.
C. buy foreign currency and buy domestic government bonds.
D. sell foreign currency and buy domestic government bonds.
Answer: D
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Suppose that the production function for the economy is Y = AK0.2L0.8. If the capital stock = 40,000, the quantity of labor = 10,000, and the efficiency index = 1, the marginal product of capital is
A) $0.066. B) $0.20. C) $1.05. D) $1.58.
The profit-maximizing output for the perfectly competitive firm occurs at the point at which
A) TR - MR is at a maximum. B) TR - TC is at a minimum. C) MR = MC. D) TR - ATC is at a maximum.
Why wasn't everyone else already implementing group responsibility to lend to the poor in the example in the text?
A. Governments of poor countries had regulations against group responsibility. B. The idea was genuinely new. C. It was not profitable. D. It was easy for groups to provide false social security numbers for members that did not exist.
A . What will happen to rents earned by landowners if population grows? Why? b. Will population growth ensure rents for all landowners? Explain