Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real exchange rate and monetary base in the context of the Three-Sector-Model? Assume the nominal exchange rate is stated as: (Foreign currency per Domestic
currency).
a. The real exchange rate rises and monetary base falls.
b. The real exchange rate and monetary base fall.
c. The real exchange rate and monetary base remain the same.
d. The real exchange rate falls and monetary base rises
e. There is not enough information to determine what happens to these two macroeconomic variables.
.A
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People who run their own businesses
A) can keep their labor costs down by not hiring any employees. B) have lower labor costs if they dislike working for anyone else than if they don't mind working for others. C) have no labor costs unless the business is incorporated. D) have the same labor costs as people who hire employees to run their businesses.
If Mario's Pizza offers consumers who purchase one medium sized pizza a second pizza at half price, this is an example of ________.
A) third-degree price discrimination B) second-degree price discrimination C) first-degree price discrimination D) zero-degree price discrimination
For a monopoly producing any output level greater than one, the marginal revenue curve:
A. lies below the demand curve. B. is minimized when total revenue is maximized. C. lies above the average revenue curve. D. is the same as the demand curve.
Which of the following examples would most likely happen if there was a money shortage?
a. Oliver takes all of his money out of CDs. b. Charlotte places half of her paycheck in CDs and half in a checking account. c. Hunter invests 90 percent of his money in U.S. Treasury bills. d. Ruby transfers $10,000 from CDs to a high-interest saving account.