Suppose two countries make a credible commitment to fix their bilateral exchange rate. In such a situation, we know that
A) the uncovered interest parity condition no longer holds.
B) the real exchange rate must be constant as well.
C) each country can freely allow its interest rate to diverge from that of the other country.
D) the interest rate in the two countries must be equal.
E) neither country will run a trade deficit.
D
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Based on the following information, compute the value of the M2 measure of the money supply. AssetsBillions of DollarsM1530Money market mutual funds800Savings deposits1,800Demand deposits200Small denomination time deposits1,100
A. $3,900 billion B. $2,900 billion C. $4,520 billion D. $4,230 billion
In which of the cases given below will the elasticity of demand for workers who produce yo-yos be most inelastic? The price elasticity of demand for yo-yos is:
A. 5, and labor's share of total costs is 20 percent B. 5, and labor's share of total costs is 75 percent C. .1, and labor's share of total costs is 20 percent D. .1, and labor's share of total costs is 75 percent
The price a perfectly competitive firm receives for its output
A) is determined by the interaction of all sellers and all buyers in the firm's market. B) is determined by the interaction of the firm and all of the consumers who buy from the firm. C) will be lowered by the firm in order to sell more output. D) will not change in response to changes in market demand and supply because the firm is a price taker.
Profits will be maximized when the slope of the total revenue curve and the slope of the total cost curve equal zero.
Answer the following statement true (T) or false (F)