If prices rise within a country, then, other things equal, the value of a unit of domestic currency will:
a. rise in both the domestic and the foreign exchange markets.
b. fall in both the domestic and the foreign exchange markets.
c. rise in the domestic market and fall in the foreign exchange market.
d. fall in the domestic market and rise in the foreign exchange market.
e. fluctuate unpredictably in both domestic and foreign exchange markets.
b
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The loss of the highest-valued alternative defines the concept of
A) marginal benefit. B) scarcity. C) entrepreneurship D) opportunity cost.
Explain the Condorcet Paradox
What will be an ideal response?
In the long run, a monopolistic competitive firm will operate at a price which:
a. is higher than minimum long-run average cost. b. equals minimum long-run average cost. c. equals marginal cost. d. none of these.
Sizeable budget deficits can be expected in the years ahead because
a. the retirement of the baby boom generation will soon begin to push expenditures on both Social Security and Medicare upward. b. the political incentive structure encourages politicians to spend more revenue than they are willing to tax. c. both a and b are true. d. both a and b are false. Budget surpluses can be expected in the years ahead.