If an overvalued currency is allowed to float:
A) its quantity demanded in exchange for the other currency will decrease.
B) its quantity supplied in exchange for the other currency will increase.
C) its value will depreciate.
D) its value will appreciate.
C
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According to the concept of rational expectations
a. budget deficits are irrelevant to output in the short-run. b. higher deficits should increase output in the short-run if they are expected. c. lower deficits can be used to stabilize output during expansions. d. none of the above.
An activity that would not be included in GDP would be:
A. a sweater you knit for your roommate for her birthday. B. getting tomatoes from your garden and making salsa with them. C. paying a company forcleaning your house. D. None of these would be included in GDP.
If a road is congested, then use of that road by an additional person would lead to a
a. negative externality. b. positive externality. c. Pigovian externality. d. free-rider problem with rush hour drivers stuck in traffic.
Refer to the graph shown. If this monopolistically competitive firm maximizes profit, it will:
A. charge $78 per dress. B. charge $45 per dress. C. charge $85 per dress. D. shut down because it cannot cover its opportunity costs.