In the forex, the demand for dollars will decrease if:
A. interest rates are lower in the U.S. relative to interest rates abroad.
B. foreigners wish to buy U.S. goods.
C. interest rates are higher in the U.S. relative to interest rates abroad.
D. foreigners wish to buy U.S. financial assets.
Answer: A
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A new law applied to a competitive market that requires that laid off workers be paid a large severance payment will
A) not generate a deadweight loss. B) increase total welfare. C) increase consumer surplus in the market. D) decrease consumer surplus in the market.
How does a firm that is losing money in the short run decide whether to shut down or continue to produce to minimize its losses?
Shortage
What will be an ideal response?
If the home nation allows free trade but imposes a tariff on a product currently produced by a home firm monopoly, what is the outcome?
a. The home firm then will regain its monopoly control over the price. b. The home firm will be able to charge a higher price (world price + tariff), but it will become a price taker, just like a competitive firm. c. The home nation's firm will be able to limit quantity and charge a higher price. d. The monopoly firm will lower price, increase sales, and undercut the foreign competition.