When a government changes the official exchange rate target in a fixed exchange regime, there is a danger of
A) realignment pain.
B) systemic risk.
C) crowding out.
D) a beggar-thy-neighbor effect.
A
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Suppose there are 5 million unemployed workers seeking jobs. After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work. As a result of this, all else equal, the official unemployment rate would
A. be unchanged. B. increase in the short run but eventually decline. C. increase. D. decline.
Savers are willing to lend out money because:
A) they prefer to spend money in the future rather than today. B) the rate of inflation in an economy is normally positive. C) of altruism. D) the rate of inflation in an economy is normally negative.
If an unregulated electric company is a monopolist and faces demand of Q = 50 - 10P. It has a constant marginal cost of 1 and must pay an environmental fee to the government of 0.2 per unit of output. In this situation, the profit-maximizing level of output is:
a. 5 b. 10 c. 20 d. 50
The story in your book about Austria and the nuclear power plants is a clear case of which of the following?
A. When externalities exist it is easy to negotiate an agreement between the offender and the offended party. B. When coal powered plants become offensive countries will switch to nuclear power in order to maintain political stability in a region. C. The story supports the claim of the Coase Theorem that the liability for actions should be placed on the side that has the lowest cost of correcting the problem. D. Political differences can sometimes override rationality, raising negotiation costs and making solutions difficult or impossible.