Opportunity cost of an activity
a. Is known to all parties
b. Cannot be measured in dollar terms
c. May include both monetary costs and foregone incomes
d. Is known with all certainty
c
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Each of the following factors might interfere with the efficiency of perfect competition except:
a. increasing returns to scale. b. imperfect price information. c. externalities. d. diminishing returns to scale.
If the value of the price elasticity of demand is -0.2, this means that a
a. 20 percent decrease in price causes a 1 percent increase in quantity demanded b. 0.2 percent decrease in price causes a 1 percent increase in quantity demanded c. 5 percent decrease in price causes a 1 percent increase in quantity demanded d. 0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded e. 100 percent decrease in price causes a 200 percent increase in quantity demanded
Suppose we were analyzing the Turkish lira per euro foreign exchange market. If The Euro-Area's interest rate falls relative to Turkey and nothing else changes, then the:
a. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing an appreciation of the euro. b. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market rises, causing an uncertain change in the value of the euro. c. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing a depreciation of the euro. d. The supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market rises, causing an appreciation of the euro. e. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.
The main difference between regular open-market operations and quantitative easing (QE) is:
A. whether the Fed is trying to increase or decrease interest rates. B. that open-market operations is conducted by the Fed, while quantitative easing is mandated by Congress. C. whether the Fed is buying or selling financial assets. D. the type and term of the financial assets targeted.