Which of the following is most central to the understanding of the economic crisis of 2008?
a. the decline of the stock market in late 2007
b. the housing boom (2001-2005) and bust (2007-2008)
c. the sharp rise in oil prices in 2008
d. unethical investment practices beginning in 2000
B
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The short run sequence of events following an unanticipated shift to a more expansionary monetary policy would be lower interest rates followed by dollar
a. depreciation, and an increase in the current account deficit. b. depreciation, and a decrease in the current account deficit. c. appreciation, and an increase in the current account deficit. d. appreciation, and a decrease in the current account deficit.
Assume a certain competitive price-taker firm is producing Q = 1,000 units of output. At Q = 1,000 . the firm's marginal cost equals $15 and its average total cost equals $11 . The firm sells its output for $12 per unit. At Q = 1,000 . the firm's profit amounts to
a. -$200. b. $1,000. c. $3,000. d. $4,000.
Define decreasing returns to scale, illustrating your definition with isoquants. What are some reasons why firms might experience decreasing returns to scale?
What will be an ideal response?
The expected rate of currency depreciation is equal to the proportional difference between the forward rate and the spot rate. This is known as the:
a. forward depreciation. b. backward depreciation. c. forward premium. d. backward premium.