In 1923, Germany experienced a very severe inflation. As prices in Germany rose, the demand in the foreign exchange market for Reichsmarks, the German currency of the time:
A. fell and the supply of them rose, decreasing their value.
B. rose and the supply of them fell, decreasing their value.
C. fell and the supply of them also fell, increasing their value.
D. rose and the supply of them also rose, decreasing their value.
Answer: A
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The rate at which a firm is able to substitute one input for another while keeping the level of output constant is called the
A) marginal rate of technical substitution. B) isoquant substitution rate. C) opportunity cost of inputs. D) input trade-off rate.
Explain how firms that each produce as efficiently as they can may not be equally productive
What will be an ideal response?
In executing countercyclical policy, the Fed
a. is more effective during recessions than during inflationary periods b. is more effective during inflationary periods than during recessions c. is typically ineffectual because it is difficult for the Fed to determine just where the economy is on the business cycle d. relies on the government to execute complementary fiscal policy otherwise the Fed's monetary policy is weak and typically ineffective e. relies more on moral suasion than on the three primary tools available to it
Direct foreign investment in the LDCs
a. explains whatever economic growth the LDCs had in the last quarter of the 20th century b. pushes the production possibilities curve inward toward the origin because resources are being diverted from the LDCs' own production activities c. leads to substantial LDC debt to rich nations d. cannot help the LDCs and can actually hinder their development because LDCs become reliant on it e. can help the LDCs but cannot be a substitute for their own development efforts