Suppose the G8 nations decide that the dollar is too strong (high in value) relative to the yen. These nations might:
A. use official reserves of yen to buy dollars.
B. use official reserves of dollars to buy yen.
C. encourage Japan to print more yen.
D. encourage the United States to increase interest rates.
B. use official reserves of dollars to buy yen.
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The figure above shows the market for milk. If the government pays the milk producers a subsidy and production increases to 300 gallons per day
A) the market is efficient because the marginal social benefit from the last gallon of milk exceeds its marginal social cost. B) the market is efficient because the total social benefit from milk exceed the total social cost. C) there is a deadweight loss because the marginal social benefit from the last gallon of milk exceeds its marginal social cost. D) there is a deadweight loss because the marginal social cost of the last gallon of milk exceeds its marginal social benefit.
Continued inflation occurs
A) if there is a sustained increase in the price level. B) only if there is a sustained increase in the price of every good and service. C) only if there is a sustained increase in the price of every good and service by the same dollar amount. D) only if there is a sustained increase in the price of every good and service by the same percentage.
Figure 33-8
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In Figure 33-8, which of the following points cannot be observed in the long run?
A. A B. B C. C D. E
If consumers are very foresighted, we would expect actual consumption spending to
A) increase during recessions. B) increase during episodes of stagflation. C) have no relation to wealth. D) resemble a "random walk." E) be entirely predictable.