Beginning in the early 1970s, many nations abandoned their dollar standard and moved toward a system of:
A) fixed exchange rates based on gold.
B) fixed exchange rates based on the Deutsche Mark.
C) floating exchange rates.
D) real money systems in which currencies were backed by government bonds.
Ans: C) floating exchange rates.
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When producing a good creates pollution, an external cost, and the government imposes a tax equal to the marginal external cost, then
A) the amount of output moves farther away from the efficient amount. B) transaction costs will be high. C) the efficient amount of the good will be produced. D) property rights must have already been established.
If the cost of fertilizer rises, then the price of corn will:
a. rise. b. fall. c. remain unchanged. d. react unpredictably.
Which of the following will limit the money creation process to an amount less than the potential amount?
a. bank pursuit of profits b. increase in currency holdings by the public c. business demand for loans d. increased use of credit cards
The production function shows
A) the incremental output gained by improving the production process.
B) the maximum output that can be produced from each possible quantity of inputs.
C) the technology used to produce output.
D) the total cost of producing a given quantity of output.