In order to maintain a fixed exchange rate:
A. a country must constantly increase its money supply.
B. Maintaining a fixed exchange rate is unrelated to the money supply.
C. a country must constantly decrease its money supply.
D. a country cannot change its money supply.
Answer: D
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An expansion ends when the economy
A) hits a trough and then enters a recession. B) hits a peak and then enters a recession. C) begins to grow following a peak. D) has grown for two quarters in a row.
If the demand decreases in a perfectly competitive market, firms will likely:
A. experience negative profits in the short run. B. experience zero profits in the long run. C. exit the market in hopes of capturing profits elsewhere. D. All of these are true.
Recall the Application about federal quality standards in the market for kiwifruit to answer the following question(s).Recall the Application. Prior to enactment of the federal government's order:
A. grocers were willing to pay less for any California kiwifruit than for any New Zealand kiwifruit. B. grocers were willing to pay more for any California kiwifruit than for any New Zealand kiwifruit. C. grocers were willing to pay more for California kiwifruit that had been harvested at maturity than for any New Zealand kiwifruit. D. California and New Zealand kiwifruit sold for the same price.
Last year the price of corn was $3 a bushel and the quantity of corn demanded was 10 million bushels. This year the price of corn was $4.00 a bushel and the quantity demanded was 9 million bushels. Is this evidence that law of demand does not apply to
corn? A. Yes, because there is a direct relationship between the price of corn and the quantity supplied B. Yes, because there is an inverse relationship between the price of corn and the quantity demanded C. No, because the other-things-equal assumption was violated over the two year period D. No, because the evidence indicates that there is a shortage of corn