Suppose that Venezuela experiences significant capital outflows after a recent election. If the nation had fixed exchange rates, what effect would these flows have had on Venezuela's reserves account and value of the Bolivar (the Venezuelan currency)?
a. Reserves account would rise and value of the Bolivar would not change.
b. Reserves account would not change and value of the Bolivar would fall.
c. Reserves account would fall and value of the Bolivar would not change.
d. Reserves account would fall and value of the Bolivar would fall.
e. Reserves account would fall and value of the Bolivar would rise.
.A
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A firm is generating detrimental externalities when
a. MSC is less than MPC. b. MSC is the same as MPC. c. MSC is greater than MPC. d. MPC includes some incidental costs.
A decrease in Swiss interest rates will cause:
A. an increase in the demand for U.S. dollars and an increase in the exchange rate of Swiss francs per dollar. B. a decrease in the demand for U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar. C. an increase in the supply of U.S. dollars and a decrease in the exchange rate of Swiss francs per dollar. D. a decrease in the supply of U.S. dollars and an increase in the exchange rate of Swiss francs per dollar.
Which of the following is a TRUE statement about the economic assumption of rationality?
A. Individuals who are rational necessarily ignore the interests of others. B. People make decisions as if they are most selfish in the world. C. Individual behavior may be irrational but group behavior is always rational. D. Individuals generally act as though they are rational.
Which of the following is a main conclusion about growth for OECD countries and the four rich countries examined in the chapter?
A) There has been a large increase in the standard of living since 1950. B) The growth rates have decreased since the mid-1970s. C) There has been a convergence of output per capita since 1950. D) all of the above E) none of the above