The supply curve of U.S. dollars is drawn assuming other things constant, such as
a. income in the rest of the world
b. expectations about the rate of inflation in the United States relative to the rest of the world
c. U.S. tastes and preferences for foreign goods
d. the interest rate in the United States relative to the rest of the world
e. tastes and preferences of the rest of the world for U.S. goods and services
C
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At his profit-maximizing level of output, a monopolist’s average total cost curve is tangent to his demand curve. The monopolist
A. is earning a negative economic profit. B. may or may not be earning a negative economic profit. C. is earning zero economic profit. D. is earning a positive economic profit.
If demand is taken into account, firms that use cost-plus pricing can adjust price by
A) letting sales fall, but hold the markup constant if demand falls. B) lowering markups on price-elastic goods and raising markups on price-inelastic goods. C) letting sales rise, but hold the markup constant if demand rises. D) raising markups on price-elastic goods and lowering markups on price-inelastic goods.
If the inflation rate is rising, which one of the following would the Fed need to do to reduce the inflation rate?
A. Reduce reserve requirements B. Reduce margin requirements C. Encourage more discount borrowing D. Increase the federal funds rate
Holding all other factors constant, consumers demand more of a good the
A) higher its price. B) lower its price. C) steeper the downward slope of the demand curve. D) steeper the upward slope of the demand curve.