The Plaza Accord of 1985 announces that the
A) G-5 countries will intervene in the foreign exchange market to bring about a dollar appreciation.
B) G-7 countries will intervene in the foreign exchange market to bring about a dollar depreciation.
C) G-5 countries will intervene in the foreign exchange market to bring about a dollar depreciation.
D) G-7 countries will intervene in the foreign exchange market to bring about a DM depreciation.
E) G-5 countries will not intervene in the foreign exchange market unless the dollar needs to appreciate.
C
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Refer to Figure 9-4. Suppose the government allows imports of leather footwear into the United States. The market price falls to $24. What area represents consumer surplus?
A) V + W + X + Y B) R + S C) R + S + T + U D) R + S + V
Suppose the cost of producing two goods, x and y, can be represented as C = ax + by + cxy. If there are economies of scope, then which of the following must be TRUE?
A) c > 0 B) a + b = -c C) c = 0 D) c < 0
In periods of high inflation,
A. people want to hold on to as much money as possible. B. the purchasing power of money is decreasing. C. nobody wants to work and earn income. D. low nominal interest rates are likely to result.
Farmers who purchase insurance against crop failures tend to be pooled with farmers far away. Why might this be the case?
A) The weather in a single geographic area represents idiosyncratic risk, which is diversifiable. B) The weather in a single geographic area represents systematic risk, which is not diversifiable. C) The weather in far-flung geographic areas represents systematic risk, which is not diversifiable. D) The weather in far-flung geographic areas are commonly positively correlated.