Why can exchange rates be very volatile?
What will be an ideal response?
Exchange rates can be volatile because in the foreign exchange market the factors that affect the supply also affect the demand and they reinforce each other. For instance, an increase in demand (which raises the exchange rate) often is accompanied by a decrease in the supply (which also raises the exchange rate). As a result, the exchange rate soars higher.
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Tacit collusion is more likely to occur when firms' costs ________ closely related and their products ________ close substitutes.
A) are not; are B) are; are not C) are not; are not D) are; are
If a regulatory commission wishes to allow a firm to earn a normal rate of return, it should set price equal to: a. marginal revenue
b. marginal cost. c. average total cost. d. average variable cost.
If the society chooses point B instead of point C,
Hypothetical Production Schedule for a Two-Product Economy
A. economic growth is more likely.
B. economic growth is less likely.
C. the chances of achieving economic growth will not be affected.
D. unemployment will result.
A simplified representation of a particular problem is a:
A) model. B) constant. C) hypothesis. D) law.