In an economy with a fixed exchange rate, when the market forces try to change the exchange rate, the government:
A. often has to deal with an unhappy domestic population who are constantly dealing with shortages or surpluses of their currency.
B. declares it can't change, and holds it constant.
C. must buy or sell its currency using its own reserve to bring equilibrium in the market to where it has "fixed" it.
D. None of these statements is true.
Answer: C
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An inward shift of the demand curve for a product causes outward shifts in the demand curves for all the factors used to produce the product.
Answer the following statement true (T) or false (F)
What is the price level?
What will be an ideal response?
When the slope of the total production curve begins to flatten:
A. additional inputs adds less to total production than the inputs added before. B. diminishing marginal product must be occurring. C. the marginal product must be decreasing. D. All of these are true.
Trevor's Tire Company produced and sold 500 tires. The average cost of production per tire was $50 . Each tire sold for a price of $65 . Trevor's Tire Company's total profits are
a. $7,500. b. $25,000. c. $32,500. d. $67,500.