In the monetary small open-economy model with a fixed exchange rate, the domestic
A) government loses control over the level of domestic government spending.
B) government loses control over the level of domestic taxes.
C) government loses control over the level of domestic government spending and domestic taxes.
D) central bank loses control over the domestic stock of money.
D
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Decreasing returns to scale may occur because increasing the amount of inputs used
A) increases specialization. B) always increases the amount of output produced. C) may cause coordination difficulties. D) increases efficiency.
Microeconomics deals with the analysis of all the following questions except how:
a. the wages of carpenters are determined. b. high did unemployment rise during the Great Depression. c. does Ford decide how to price its cars. d. does a college student decide how to spend her income. e. do monopolies and competitive markets differ.
For a given decrease in demand, the effect on price is smallest and the effect on quantity exchanged largest when: a. supply is perfectly elastic
b. supply is elastic. c. supply is unit elastic. d. supply is perfectly inelastic.
Suppose the current account of a country is initially in balance. A new transaction occurs so that the current account is now in surplus. Official reserve balance is maintained before and after the transaction occurs. From this, we know that
A. the government must make official reserve transactions. B. the financial account is now in deficit. C. the balance of goods and services is now in surplus. D. the balance of trade is now in surplus.