Under a fixed exchange rate regime, if a central bank must intervene to purchase the ________ currency by selling ________ assets, then, like an open market sale, this action reduces the monetary base and the money supply, causing the interest rate
on domestic assets to rise. A) domestic; foreign
B) domestic; domestic
C) foreign; foreign
D) foreign; domestic
A
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
What is Pareto optimality?
What will be an ideal response?
Assume that a firm's marginal cost is $10 and the elasticity of demand is -2. We can conclude that the firm's profit maximizing price is approximately
A) $20. B) $5. C) $10. D) The answer cannot be determined without additional information.
CEOs must create value for shareholders to be successful
Indicate whether the statement is true or false