The principal demanders of U.S. dollars in the foreign exchange market are:
A. the Federal Reserve.
B. U.S. households or firms wishing to purchase foreign goods or assets.
C. U.S. households or firms wishing to purchase U.S. goods or assets.
D. foreigners wishing to purchase U.S. goods or assets.
Answer: B
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The freedom of entry and exit in monopolistic competition means that firms
A) enter the market when economic losses are being suffered. B) exit the market when economic profits are being earned. C) enter the market when normal profits are being earned. D) can enter a market to compete for economic profits and leave when economic losses are being incurred. E) find it easy to permanently earn an economic profit.
A decrease in nominal gross domestic product necessarily entails a decrease in
A) both real output and the price level. B) either real output or the price level (or both). C) real output and employment. D) the price level and employment.
Which of the following statements is TRUE about the role of gifts given to U.S. citizens from foreign residents?
A) Gifts are not included in the balance of payments because of the nature of the gift. B) Gifts are only included in the balance of payments if the gift is given to a government official. C) Gifts are included in the balance of payments. D) Gifts given to U.S. citizens are not included in the balance of payments but gifts given to foreigners are included.
A profit-maximizing firm will continue to expand output:
a. as long as the revenues from the production and sale of an additional unit exceeds the average cost of the unit. b. until the average cost of producing the good or service is at a minimum. c. as long as the revenues from the production and sale of an additional unit exceeds the marginal cost of the unit. d. until the marginal cost of producing a good or service is at a minimum.