The decision to form a currency union is similar to the decision to peg; however, the currency union requires:
A) a lower level of commitment and therefore requires a lower net benefit.
B) a higher level of commitment and therefore requires a higher net benefit.
C) more political integration and an agreement to limit trade.
D) the loss of political autonomy and is therefore riskier.
Ans: B) a higher level of commitment and therefore requires a higher net benefit.
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Tickets to the Indiana-Purdue basketball game are usually sold out in advance of game day. This suggests:
a. the price of the tickets must be very high or else people would not consider them valuable. b. the price is set below the equilibrium level. c. the Indiana basketball stadium is relatively small. d. everyone who attends the game will enjoy it.
As long as market price remains above the average total cost, and the firm chooses the profit-maximizing level of output, it will:
A. earn zero profits. B. make profits. C. make a loss. D. Any of these is possible.
Describe the signaling aspect of the price system regarding the three basic economic questions
What will be an ideal response?
As disposable income decreases, consumption:
A. And saving both increase B. And saving both decrease C. Increases and saving decreases D. Decreases and saving increases