The balance of payments constraint refers to the limits on:
A. exchange rate policy imposed by flexible exchange rates.
B. currency convertibility observed in most developing countries.
C. domestic macroeconomic policy, arising from a shortage of international reserves.
D. macroeconomic policy resulting from IMF conditionality.
Answer: C
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Answer the following statement(s) true (T) or false (F)
1. We know that the producer's surplus accruing to a simple monopoly firm must be greater than operating in a competitive market, else firms would not act as monopolists. 2. In both the short-run and the long-run, a monopoly is guaranteed to earn positive profits. 3. An excise tax will increase the deadweight loss due to monopoly, but an excise subsidy can reduce the deadweight loss. 4. An unregulated, profit maximizing monopoly will never set a price where demand is inelastic. 5. The large increase in the price of oil and in the total revenues and profits of the US oil industry in the 1990's are evidence that it was exercising monopoly power.
What explains any divergence between nominal and real GDP?
A) Constant prices B) Changing prices C) Constant output D) Changing output E) None of the above.
The short-run supply curve for a perfectly competitive firm is that part of the firm's marginal cost curve that lies above the minimum point of its average variable cost curve
Indicate whether the statement is true or false
The account that shows international transactions involving currently produced goods and services is called the
A) trade balance. B) current account. C) balance of payments. D) capital account.