Research has shown that the inflation in a country is:
A) always high if there is a fixed exchange rate.
B) always low if there is a flexible exchange rate.
C) not dependent on the choice of exchange rate regime.
D) higher in developing countries coming out of hyperinflation.
Answer: C) not dependent on the choice of exchange rate regime.
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When a firm is experiencing economies of scale
A) the MP curve slopes upward. B) the LRAC curve slopes downward. C) diminishing returns to labor have been suspended. D) the MC curve slopes downward.
Refer to Table 4-2. The table above lists the highest prices five consumers are willing to pay for a concert ticket. If the price of one ticket rises from $20 to $38
A) only three tickets will be sold. B) no one will buy a ticket. C) consumer surplus decreases from $62 to $12. D) consumer surplus increases from $88 to $142.
When the exponents of a Cobb-Douglas production function sum to more than 1, the function exhibits
A) constant returns. B) increasing returns. C) decreasing returns. D) either increasing or decreasing returns.
When the bandwagon effect exists, a change in price is likely to
A) change total revenue less than if there were no network externalities. B) change total revenue more than if there were no network externalities. C) change total revenue the same amount as if there were no network externalities. D) not change total revenue at all.