The term "flexible exchange rates" refers to
A. the increase in the exchange value of one nation's currency in terms of an other nation.
B. the decrease in the exchange value of one nation's currency in terms of another nation.
C. a nation in which households, firms, and governments buy and sell national currencies.
D. a situation in which exchange rates are allowed to fluctuate in the open market in response to changes in supply and demand.
Answer: D
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A) fixed; horizontal B) fixed; vertical C) variable; horizontal D) variable; vertical
One of the negative impacts of export subsidy is that:
a. the price of the domestic good increases in the world market. b. the domestic supply of the goods increases more than proportionately than increase in demand. c. the domestic cost of production of the exportable increase. d. it results in a general deflation and hence the domestic producers incur losses. e. it is financed by the taxes paid by domestic consumers and hence it harms them.
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a. True b. False Indicate whether the statement is true or false
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a. Reducing either the minimum wage or the time and cost to open a business would have no effect on the long-run aggregate supply curve. b. Reducing the minimum wage and the time and cost to open a business would both shift the long-run aggregate supply curve to the right. c. Reducing the minimum wage would shift long-run aggregate supply to the right. Reducing the time and cost to open a business would have no affect on the long-run aggregate supply curve. d. Reducing the minimum wage would have no affect on the long-run aggregate supply curve. Reducing the time and cost to open a business would shift the long-run aggregate supply curve to the right.