Answer the following statement(s) true (T) or false (F)
1. Present-day fluctuations in exchange rates are determined solely by market forces.
2. When exchange rates change, they affect not only the currency market but the product markets as well.
3. Since the advent of flexible exchange rates, world trade has expanded.
4. The most important advantage of the Bretton Woods fixed-rate system is that it has reduced the speculative rampages that were common under a flexible-rate system.
5. Booming futures markets in foreign currencies opened in Chicago, New York, and in foreign financial centers during the years that the world used the Bretton Woods system.
1. False
2. True
3. True
4. False
5. False
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An increase in aggregate demand causes an increase in ________ only in the short run, but causes an increase in ________ in both the short run and the long run
A) real GDP; real GDP B) real GDP; the price level C) the price level; real GDP D) the price level; the price level
In what way do competitive markets have a "natural remedy" for discriminatory hiring practices?
a. Governments regulate to resolve problems of discrimination. b. Profit-maximizing firms that do not discriminate tend to replace firms that discriminate. c. Wages paid to groups that are victimized by discrimination are eventually bid up to above-equilibrium levels. d. Discrimination is usually the outcome of rational decision-making processes, and competitive markets produce rational outcomes.
Refer to the information provided in Figure 8.9 below to answer the question(s) that follow. 
Figure 8.9
Refer to Figure 8.9. If the market price of hay falls to $18, then to maximize profits this farmer should produce
A. 350 bales of hay. B. 500 bales of hay. C. 750 bales of hay. D. a level of output that is indeterminate from this information.
Which of the following changes would have the largest impact on the CPI?
A) a one percent increase in the cost of housing B) a one percent increase in the cost of transportation C) a one percent increase in the cost of medical care D) a one percent increase in the cost of education E) a one percent increase in the cost of apparel