A currency depreciation affects total spending in the short run through expenditure switching, but the net external wealth effect also can influence:
A) other types of expenditure such as consumption or investment.
B) the ability of the nation to keep up technologically, since new capital will be more expensive.
C) the production function of the home country.
D) the ability of the government to conduct monetary policy.
Ans: A) other types of expenditure such as consumption or investment.
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If an economy is operating at a point inside the production possibilities curve,
What will be an ideal response?
A perfectly competitive firm can:
A. affect the market price for its good. B. sell as much as it can produce at the market price. C. prevent entry of other firms into their market. D. collude with its competitors to set prices.
The increase in a firm's total revenues resulting from hiring an additional unit of labor is known as the marginal:
a. product. b. revenue product. c. cost. d. none of these.
If the U.S. dollar depreciates relative to the euro, then:
A. American goods will be more expensive for Germans B. German goods will be less expensive for Americans C. The euro will appreciate relative to the dollar D. The euro will depreciate relative to the dollar