With fixed exchange rates, central banks must finance trade deficits, allow a devaluation, or else use trade restrictions to restore equilibrium
Indicate whether the statement is true or false
TRUE
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When a firm is considered to be a "price taker" that means that the firm
A) can charge any price that it wants to charge, that is, "take" any price it wants. B) pays a fixed price for all of its inputs. C) will accept ("take") the lowest price that its customers offer. D) cannot influence the market price of the good that it sells.
Public goods are basically
A) rival in consumption. B) nonrival in consumption. C) depletable in consumption. D) nondepletable in consumption.
How does the multiplier for a change in government spending compare to the multiplier for a change in taxes?
a. It is smaller. b. It is the same. c. It is larger. d. It cannot be calculated.
Suppose that in a month the price of a gallon of milk increases from $2 to $2.50. At the same time, the quantity of gallons of milk demanded decreases from 100 to 80. The price elasticity of demand for gallons of milk (calculated using the midpoint formula) is approximately:
A. 0.11. B. 0.2. C. 1. D. 1.2.