Prior to World War II, the international financial system had operated on
a. a floating exchange rate system
b. a managed exchange rate system
c. a laissez-faire exchange rate system
d. the gold standard
e. the dollar standard
D
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Refer to Figure 4-1. If the market price is $1.00, what is Arnold's consumer surplus?
A) $1.00 B) $2.00 C) $3.00 D) $7.00
Which of the following statements concerning opportunity costs is false?
a. Opportunity costs are only expressed in money terms. b. Every choice involves opportunity costs. c. Opportunity costs are the highest-valued alternatives that must be forgone when a choice is made. d. The concept of opportunity cost is used to demonstrate scarcity. e. Economists refer to the forgone benefits of the next-best alternative as opportunity costs.
Consider two goods - one that generates external benefits and another that generates external costs. The actual market outcome would
a. result in a price that is lower than the efficient price for both goods. b. result in a price that is higher than the efficient price for both goods. c. result in a price that is lower than the efficient price for the good with an external benefit and a price that is higher than the efficient price for the good with an external cost. d. result in a price that is higher than the efficient price for the good with an external benefit and a price that is lower than the efficient price for the good with an external cost.
Economic fine-tuning is the (usually frequent) use of
A) monetary policy that is based on a predetermined steady growth rate in the money supply to counteract even small undesirable movements in economic activity. B) only fiscal policy to counteract even small undesirable movements in economic activity. C) monetary and fiscal policies to counteract even small undesirable movements in economic activity. D) fiscal policy that both balances the budget and counteracts even small undesirable movements in economic activity.