Many developing countries face a balance of payments constraint because:
A. they fail to implement exchange rate policy correctly.
B. they hold too few international reserves.
C. they hold too many international reserves.
D. the IMF forces them to adopt policies that are counterproductive.
Answer: B
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If government increases its purchases by $20 billion and the MPC = 0.9, the resulting increase in the consumption component of AD is: a. $2 billion
b. $18 billion. c. $180 billion. d. $200 billion.
Obesity is directly responsible for a massive increase in the number of cases of ______.
a. AIDS b. Hepatitis B c. Type II Diabetes d. Alzheimer’s
In order to minimize the NET costs associated with crime,
A. no crime should be eliminated. B. steps must be taken to eliminate all crime. C. crime should be reduced to the level at which the marginal cost from crime equals the marginal cost of crime prevention. D. crime should be reduced to the level at which the total benefit from crime equals the total cost of crime prevention.
Early settlers in the town of Dry Gulch drilled wells to pump as much water as they wanted from the single aquifer beneath the town. (An aquifer is an underground body of water.) As more people settled in Dry Gulch, the aquifer level fell and new wells had to be drilled deeper at higher cost. The town council has proposed putting a meter on each household's pump, and charging residents for each gallon of water used. This would:
A. have no effect on water use. B. reduce total economic surplus. C. discourage residents from using too much water. D. convert private property to public property.