As the dollar exchange rate, e, decreases, the quantity of dollars supplied in the foreign exchange market ________, and the quantity of dollars demanded in the foreign exchange market ________.
A. increases; increases
B. decreases; increases
C. decreases; decreases
D. increases; decreases
Answer: B
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Normally in the United States the relationship between nominal and real GDP for a given year is
A) real GDP is greater than nominal GDP because of price increases. B) nominal GDP is greater than real GDP because of price increases. C) nominal GDP equals real GDP. D) nominal GDP is greater than real GDP because of price decreases.
What is marginal cost? How is it measured?
What will be an ideal response?
We may be tempted to determine the optimal level of advertising expenditures at the point where the last dollar spent on advertising generates an additional dollar of sales revenue (i.e, the marginal revenue of advertising equals one)
In general, this rule will not allow the firm to maximize profits because it ignores the: A) price elasticity of demand. B) marginal cost of additional sales generated by the advertising. C) advertising-to-sales ratio. D) fixed costs of advertising.
Which of the following is true of taxes?
What will be an ideal response?