Which of the following is not true of derived demand?
A. It derives from the price of output goods.
B. It is a function of marginal physical productivity.
C. It is the marginal revenue product curve.
D. It is not affected by prices of the input factors.
Answer: C
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An approach that can be taken by someone directly involved in a transaction to solve the problems caused by information asymmetry is:
A. statistical discrimination. B. mandating that information be shared. C. proofing. D. All of these are ways to solve information asymmetry.
A central bank holds foreign exchange reserves for:
A. safekeeping. B. foreign exchange interventions. C. diversification purposes. D. diversification and safekeeping.
The time gap between a nation's decision to implement a corrective economic policy and the actual results of the policy is known as the:
A) inside lag. B) inside lapse. C) outside lag. D) outside lapse.
Referring to Figure 18.2, the peso is likely to appreciate if the exchange rate is either ________ or ________ pesos to the dollar.
A. 10; 11 B. 11; 12 C. 12; 13 D. 13; 14