An appreciation is:
A. a decrease in the value of currency.
B. a decrease in the trade deficit.
C. an increase in the trade surplus.
D. an increase in the value of currency.
Answer: D
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In a 2-good model, suppose that all individuals have tastes that are quasilinear in either good 1 or in good 2 (with some of each represented in the group.) The quasilinearity of everyone's tastes is then sufficient to insure that we can treat the group as if it were a single representative consumer.
Answer the following statement true (T) or false (F)
Which of the following would shift the supply of Florida Oranges to the left?
a. a hurricane in Florida destroying a major part of the crop b. an increase in the price of water per unit, a major input, used to irrigate the orange trees c. one of the orange grooves shuts down d. all of the above
Which of the following is a way to reduce agency costs?
a. Change the decision maker b. Transferring information to the decision maker c. Change the decision maker's incentives d. All of the above
Market prices provide information to consumers, helping them coordinate their activities so long as
a. competition is present and buyers and sellers are free to choose mutually agreeable prices. b. prices are not allowed to rise too high, causing a shortage. c. prices are legally kept equal in all markets, preventing unfair price increases in markets with shortages and unfair price decreases when a market surplus is present. d. the government carefully screens producers and effectively keeps inefficient producers out of the market.