Monetary policy under a fixed exchange-rate regime will be
A. more effective than fiscal policy.
B. more powerful with high capital mobility than with low capital mobility.
C. constrained and relatively ineffective.
D. likely to cause large and persistent deficits.
Answer: C
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An 18 percent increase in the price of a small car results in a 10 percent increase in the quantity supplied. The price elasticity of supply is equal to
A) 1.80. B) 0.55. C) 0.75. D) 0.40.
Externalities are social costs that affect parties external to a particular economic transaction
a. True b. False Indicate whether the statement is true or false
A nation’s currency is said to depreciate when exchange rates change so that a unit of its currency can buy fewer units of foreign currency.
Answer the following statement true (T) or false (F)
Marginal utility is
A. the utility obtained from the consumption of all but the last unit of a good. B. the change in utility that results from increasing the amount of a good consumed by one unit. C. the relative value of two goods when a utility-maximizing decision has been made. D. the change in the amount of a good consumed that increases total utility by one unit.