In spite of less-than-optimal currency area criteria at present in the Eurozone, some believe that the existence of a working currency union will result in:
A) an improvement in the criteria, as the union members are committed to work for more integration.
B) a gradual deterioration of the union, as members seek benefits from having an autonomous monetary policy.
C) tension and a power struggle over which will be the dominant economy in the union.
D) more delay in implementing needed reforms.
Ans: A) an improvement in the criteria, as the union members are committed to work for more integration.
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Suppose two countries have per capita real GDP of $20,000 in 2012. Country A has a growth rate of 4 percent and Country B has a growth rate of 5 percent. By 2015, the per capita real GDPs for the two countries, respectively, are (rounded)
A) $21,630 and $22,050. B) $22,400 and $23,000. C) $22,500 and $23,150. D) $25,000 and $26,500.
The profit-maximizing price of the monopolist compared to the perfectly competitive industry in the above figure are, respectively
A) P1 and P3. B) P1 and P5. C) P1 and P2. D) P2 and P5.
The more firms there are in a market, the:
A. larger will be the price effect of one firm's output decision. B. smaller will be the price effect of one firm's output decision. C. more collusion is likely to happen. D. None of these statements is true.
Airlines generally charge travelers willing to stay over Saturday night lower fares because
a. these travelers have lower incomes, and therefore, the airlines would like to help them. b. it cost less to transport travelers willing to stay over a Saturday night. c. the demand of these travelers is elastic, and therefore, the lower fares generate more revenue. d. the demand of these travelers is inelastic, and therefore, the lower fares generate more revenue for the airlines.