Suppose that the exchange rate between British pounds and U.S. dollars is originally $2.50 per pound. If it then changes to $3 for 1 pound, imports of British goods into the U.S. tend to:
a. rise
b. fall.
c. stay the same.
d. change in an indeterminate direction.
b
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As of July 2012, the 12 month CPI inflation rate was 1.4 percent and the 12 month core CPI inflation rate was 2.1 percent. The difference between these two measurements of inflation indicates
A) prices for food and fuel grew less rapidly than prices for other goods. B) prices for food and fuel grew more rapidly than prices for other goods. C) the underlying inflation rate was lower than the overall inflation rate. D) hyperinflation.
Keynes's liquidity preference theory indicates that the demand for money is
A) constant. B) positively related to interest rates. C) negatively related to interest rates. D) negatively related to bond values.
The difference between opportunity cost of the sellers and the valuation of the buyers is known as:
a. social cost. b. economic value. c. deadweight loss. d. consumer surplus.
A perfectly competitive firm in the long run earns:
A. zero economic profits and zero normal profits. B. positive normal profits but zero economic profits. C. positive economic profits but zero normal profits. D. positive economic profits and positive normal profits.