If the dollar is overvalued against the peso, it implies that:
A) the exchange rate between the dollar and the peso is flexible.
B) the quantity of dollar supplied in exchange of pesos equals the quantity of dollars demanded in exchange of pesos in the foreign exchange market.
C) the quantity of dollar supplied in exchange of pesos exceeds the quantity of dollars demanded in exchange of pesos in the foreign exchange market.
D) the quantity of dollar supplied in exchange of pesos is less than the quantity of dollars demanded in exchange of pesos in the foreign exchange market.
C
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Which of the following is NOT one of the major problems with expanding the EU?
A) Expansion has become a more difficult task because of the unwillingness of the eastern and central European countries to change. B) The programs that target EU expenditures could be stretched thin by the addition of countries with much lower incomes. C) The governance structure of the EU had to be changed to avoid becoming unwieldy and ineffective. D) The EU may be faced with an unstable eastern border with huge worker migratory flows if the transition economies fail. E) Most central and eastern European countries have large agricultural sectors and extending subsidies to these countries would entail an enormous flow of funds given the Common Agricultural Policy.
Figure 4-17
Refer to . Suppose a price floor of $7.00 is imposed. As a result,
a.
buyers' total expenditure on the good decreases by $20.00.
b.
the supply curve will shift to the left so as to now pass through the point (Q = 40, P = $7.00).
c.
the quantity of the good demanded decreases by 20 units.
d.
the price of the good continues to serve as the rationing mechanism.
Profit (or loss) per unit at the profit maximizing (or loss minimizing) level of output
A. is MN.
B. is LM.
C. is LN.
D. cannot be found on this graph.
Under adaptive expectations, the short-term effect of an unanticipated shift to a more expansionary macroeconomic policy will be a:
A. temporary reduction in the unemployment rate. B. permanent reduction in the unemployment rate. C. temporary reduction in the inflation rate. D. permanent reduction in the inflation rate.