The downside (negative aspect) associated with a free and floating exchange rates is that
a. countries appreciate their rates so that the float is only upward
b. they depend on trade agreements that can, and have been, broken
c. whether they increase or decrease, it takes currency to float the rate
d. arbitrage takes advantage of different opportunity costs
e. it creates an uncertainty about future rates that can reduce trade
E
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Refer to the graph shown. An effective price ceiling at $3 causes consumer surplus to:
A. fall from 130 to 120. B. increase from 120 to 130. C. increase from 80 to 120. D. fall from 110 to 80.
The poverty rate is defined as the percentage of the
A) population that is exempt from paying federal income taxes. B) population who qualify to receive welfare payments and food stamps. C) labor force that is poor according to the federal government's definition of poverty. D) population that is poor according to the federal government's definition of poverty.
Which of the following conditions define the short-run for any industry?
a. Firms do not incur a fixed cost. b. Firms incur both fixed as well as variable costs. c. Firms can easily enter and leave the market. d. Firms can enter but cannot leave the market.