Suppose that U.S. inflation is 3 percent and Turkish inflation is 70 percent. The effect of this discrepancy on the foreign exchange market is that
A) the Turkish currency will depreciate.
B) the dollar will depreciate.
C) it is impossible for interest rate parity to hold.
D) the Turkish currency will appreciate.
A
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An indifference curve is a line showing
A. combinations of goods that can be produced if all resources are fully employed. B. all combinations of two commodities that are equally desirable to the consumer. C. all combinations of goods over which the consumer has no choice. D. how decisions are made in a nonmarket economy.
At the profit-maximizing quantity of output for a monopolist, average revenue, marginal revenue, and price are all equal
a. True b. False Indicate whether the statement is true or false
When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of a particular good,
a. consumer surplus increases and total surplus increases in the market for that good. b. consumer surplus increases and total surplus decreases in the market for that good. c. consumer surplus decreases and total surplus increases in the market for that good. d. consumer surplus decreases and total surplus decreases in the market for that good.
A consumer chooses an optimal consumption point where the
a. marginal rate of substitution exceeds the relative price ratio. b. slope of the indifference curve equals the slope of the budget constraint. c. ratio of the prices equals one. d. All of the above are correct.