Under a flexible exchange rate system, an increase in the value of the U.S. dollar in terms of other currencies is referred to as
A. a monetizing of the U.S. dollar.
B. a depreciation of the U.S. dollar.
C. an appreciation of the U.S. dollar.
D. a devaluation of the U.S. dollar.
Answer: C
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When the production of a good creates an external cost, by setting the tax rate equal to the ________, firms can be made to behave in the same way as they would if they bore the cost of the externality directly
A) marginal external cost B) marginal social benefit C) marginal private benefit D) marginal social cost
The production of 1,000 shirts leaves an apparel manufacturer with a capacity to produce no more than 1,100 trousers during a month. This implies:
a. the production level is inefficient. b. that if the production of trousers is reduced, that of shirts will also decline. c. that a reallocation of resources may make previously unachievable outcomes achievable. d. the production level is efficient.
The long run is a period of
a. at least one year. b. sufficient length to allow a firm to expand output by hiring additional workers. c. sufficient length to allow a firm to alter its plant size and capacity and all other factors of production. d. sufficient length to allow a firm to transform economic losses into economic profits by hiring better workers.
. Until 2008, the Fed could make the market federal funds rate equal the target rate by:
A. setting the discount rate below the federal funds rate. B. entering the federal funds market as a borrower or a lender. C. paying higher interest on reserves. D. mandating that all loans be transacted at the target rate.