The Bretton Woods System failed in 1971 due to:
A. high rates of inflation in the U.S.
B. the desire on the part of participating countries to have an independent monetary policy.
C. greater mobility of capital across international borders.
D. all of the reasons given are correct.
Answer: D
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Which of the following statements is NOT true about the relationship between the dollar value of total output and total income?
A) The dollar value of total output equals total income because profit is considered a cost of production. B) The dollar value of total output equals total income because of the economic definition of profit. C) The dollar value of total output equals total income because profit is not considered a cost of production. D) The dollar value of total output equals total income because the spending of one group is the income of another.
If the wheat industry is perfectly competitive with a market price of $4 per bushel and Farmer Brown charged $5 per bushel, how many bushels would Farmer Brown sell?
A) some, but fewer than he would at a price of $4 B) more than he would at a price of $4 C) just as many as he would at a price of $4 D) none E) More information is needed about the prices charged by the other wheat farmers.
Hector's wealth is zero, he expects to work for another 45 years at a constant salary of $80,000 and live for another 60 years. If yearly taxes are $20,000 and Hector completely smooths consumption over his lifetime, his annual consumption is
A) $37,500. B) $45,000. C) $60,000. D) $70,000.
A firm that incurs an emissions charge for polluting will install more pollution control equipment only if the:
a) Emissions charge exceeds the increased cost of installing the equipment. b) Emissions charge falls. c) Equipment will reduce pollution. d) Equipment cost is less than the marginal cost of production.