Which of the following would most likely cause a nation's currency to depreciate?
a. an increase in the nation's domestic inflation rate
b. an increase in inflation of the nation's trading partners
c. a decrease in the nation's domestic inflation rate
d. an increase in domestic real interest rates
A
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The number of times per year that a dollar is spent on final goods and services defines
A) the income velocity of money. B) the money supply. C) the price index. D) GDP.
Among developed countries, the United States has
A) one of the lower Gini coefficients. B) one of the higher Gini coefficients. C) the most unequal distribution of income. D) an income distribution right about at the median of those countries.
Marginal cost is the cost
A) that your activity imposes on someone else. B) that arises from an increase in an activity. C) of an activity that exceeds its benefit. D) that arises from the secondary effects of an activity.
A major problem with countries setting fixed exchange rates for their currencies is
A. The foreign exchange reserves of participating countries will always be depleted. B. Some participating countries are likely to experience continuing balance-of-payments deficits. C. The fixed rate will have to be maintained by currency market intervention. D. Import and export prices will probably become more unstable.