Occasional government intervention in markets for foreign currency is typical of a
A. gold standard.
B. floating exchange rate system.
C. fixed exchange rate system.
D. managed float exchange rate system.
Answer: B
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Which of the following statements concerning stabilization policy is correct?
A) Increasing government spending during an economic boom would be an example of a stabilization policy. B) Increasing taxes during a recession would be an example of a stabilization policy. C) New Keynesian economists are skeptical of the value of stabilization policies. D) Increasing the money supply during a recession is an example of a stabilization policy.
"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is
a. false; price increases will mean fewer sales, which may lower profits. b. true; this is the primary reason why economists believe that monopolies result in economic inefficiency. c. false; the monopolist is a price taker. d. true; consumers in a monopoly market have no substitutes to turn to when the monopolist raises prices.
Which of the following provides the best example of the winner's curse?
a. Sports teams bidding on free agents of uncertain abilities. b. Loyal consumers buying six packs of a popular soft drink at the grocery store. c. Employers paying skilled and experienced workers with considerable job tenure a premium wage. d. An investor estimating the value of his fixed deposit.
Define the following terms completely and concisely
a. marginal revenue b. average revenue c. optimal decision d. satisficing e. marginal profit