If the exchange rate moves from 10 Mexican pesos per U.S. dollar to 8 Mexican pesos per U.S. dollar, then the Mexican peso has ________ and the U.S. dollar has ________.
A. appreciated; depreciated
B. depreciated; appreciated
C. appreciated; appreciated
D. depreciated; depreciated
Answer: A
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Refer to Figure 7-2. The increase in domestic producer surplus as a result of the tariff is equal to
A) $11.25 million. B) $18 million. C) $32.5 million. D) $45 million.
The budget deficit or surplus in any given year, adjusted for what it would have been if the economy were producing at potential GDP, is called
a. an automatic stabilizer. b. a discretionary fiscal policy. c. a standardized employment budget. d. a countercyclical employment budget.
In reality, the long-run supply curve for a perfectly competitive market is upward sloping because:
A. of changing costs of production that firms may face. B. experienced firms will have different information and costs than new firms. C. not all firms have identical cost structures. D. All of these are true.
The real-nominal principle states that:
A. people respond more to explicit, or real, costs than to implicit costs. B. people respond more to implicit costs than to explicit costs. C. what matters to people is the face value of money or income. D. what matters to people is the purchasing power of money or income.