A classical economy is described by the equationsAD: Y = 1000 + 100M/PAS:
= 1500The real exchange rate is 3 bushels/bottle, the domestic nominal money supply is 30 florins, and the foreign price level is 8 crowns/bushel.(a)What is the nominal exchange rate?(b)If the government wants to maintain an official nominal exchange rate of 6 crowns/florin, what must the nominal money supply be?
What will be an ideal response?
(a) | 4 crowns/florin |
(b) | 20 florins |
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A monopolistically competitive market could be considered inefficient because
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Cutting costs at the beginning of a recession tends to make the most sense for a business that produces or provides
A) services. B) durable goods. C) nondurable goods. D) goods and services for export.
For a monopolist to sell more units of output
A. the price must be increased. B. demand must become more elastic. C. the other competing firms must sell fewer units. D. the price must be reduced.