The additional cost resulting from a small increase in some activity is called the
A) marginal cost. B) diminishing returns of the activity.
C) opportunity cost. D) marginal benefit.
A
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If the dollar's value changes from 120 yen per dollar to 110 yen per dollar, the dollar has
A) depreciated. B) appreciated. C) demanded. D) devalued.
Returns to scale describes the long-run relationship between:
A. the quantity of input and the average variable cost. B. the quantity of output and the average variable cost. C. the quantity of input and the average total cost. D. the quantity of output and average total cost.
The balance of payments constraint refers to the limits on:
A. exchange rate policy imposed by flexible exchange rates. B. currency convertibility observed in most developing countries. C. domestic macroeconomic policy, arising from a shortage of international reserves. D. macroeconomic policy resulting from IMF conditionality.
If a currency rapidly depreciates, what are the possible negative results to the economy of using contractionary monetary policy to address the depreciation?
What will be an ideal response?