Use the above figure. At equilibrium, the exchange rate is
A. $0.80 = 1.25 euro.
B. $1 = 1.25 euro.
C. 1 euro = $1.25.
D. $1 = 8 euros.
Answer: B
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Flexible exchange rates ________ of monetary policy to stabilize the economy and fixed exchange rates ________ of monetary policy to stabilize the economy.
A. offset the impact; reinforce the impact B. strengthen the ability; prevent the use C. prevent the use; strengthen the ability D. strengthen the impact; strengthen the impact
In the short run, a profit-maximizing price taker will expand output as long as the market price exceeds
a. average variable cost. b. marginal cost. c. average total cost. d. average fixed cost.
Which of the following two effects of a decrease in the tax rate on saving would raise savings?
a. the income effect and the substitution effect b. the income effect but not the substitution effect c. the substitution effect but not the income effect d. neither the substitution effect nor the income effect
Currently, college graduates are earning about ____ more than high school grads over the course of their careers.
A. $100,000 B. $1,000,000 C. 25 percent D. 60 percent