Explain why the U.S. government might attempt to depress the exchange rate of the U.S. dollar.
What will be an ideal response?
The U.S. government might attempt to depress the exchange rate of the dollar (i.e., depreciate the dollar relative to foreign currencies) in order to benefit the U.S. product markets. A dollar that is too strong makes U.S. exports relatively more expensive to foreign buyers. Consequently, foreigners will buy fewer U.S. goods and services. By actively trying to weaken the dollar, the U.S. government could make U.S. exports more affordable to foreigners, which would increase U.S. exports. This action would benefit U.S. firms that sell abroad and could be part of a domestic policy that focuses on boosting U.S. manufacturers and other segments of the U.S. economy that benefit from exports.
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Assume Brad worked as a contractor for a year and had revenues of $120,000 and explicit cost of $70,000 . If he could have been paid $80,000 working for a computer company, his:
a. accounting profit equaled $10,000 and he would be rational to stop working as a contractor. b. accounting profit equaled $50,000 and he would be rational to continue working as a contractor. c. economic profit equaled $50,000 and he would be rational to continue working as a contractor. d. economic profit equaled -$30,000 and he would be rational to stop working as a contractor.
In equilibrium, which of the following conditions is common to both unregulated monopoly and pure competition?
A. P = MR B. MC = P C. AR = ATC D. MR = MC
The cross price elasticity for Sprite for a change in the price of 7up is likely to be
A. negative and more negative than -1. B. zero. C. negative but less negative than -1. D. positive.
Suppose that new computer software for accounting and analysis at a business has a useful life of only one year and costs $200,000 before it needs to be upgraded to a new version. The revenue generated by this software is expected to be $250,000. The expected rate of return from this new computer software is:
A. 11 percent B. 20 percent C. 25 percent D. 80 percent