What happens to the monetary base if the domestic currency is undervalued (the central bank fixed the exchange rate below equilibrium) and the central bank intervenes to fix the exchange rate at its current level?
a. The change in the monetary base is ambiguous.
b. The monetary base is only affected by interventions of the central bank when the domestic currency is overvalued.
c. The monetary base will rise.
d. The monetary base is never affected by interventions of the central bank.
e. The monetary base will fall.
.C
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The circular flow diagram shows
A) how nominal GDP is distinct from real GDP. B) how the prices of factors are determined. C) the effects of inflation in a simple economy. D) the flows between different sectors of the economy.
Which of the following statements about the Earned Income Tax Credit Program (EITC) program is FALSE?
A) On net the EITC discourages work by low- or moderate- income earners more than it rewards work. B) It provides rebates of Social Security taxes to low-income workers. C) Recipients who receive benefit payments under Social Security are also eligible for SSI. D) It is the largest poverty reduction program in the U.S..
Suppose that utility over consumption and leisure takes the constant elasticity of substitution form 
. If 
falls between 0 and -1, then the labor supply curve is backward bending.
Answer the following statement true (T) or false (F)
Suppose that there are two goods, X and Y, that are competing for dominance in a market with network externalities. Furthermore, suppose that the market has chosen good X even though it is inferior to good Y and that the net benefits of switching from X to Y are $20 while the costs of switching are $30. If the market stays with good X, then __________________ has occurred. If the costs of switching were to fall to $15 and the market still stays with good X then ___________________________.
A. no market failure; market failure has occurred. B. market failure; no market failure has occurred. C. no market failure; there will still be no market failure. D. market failure; there will still be market failure.