In order to reduce or eliminate a chronic shortage in the market for a currency under a fixed exchange rate system, we must devalue the currency
Indicate whether the statement is true or false
FALSE
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Coase argues that every case of externalities
a. has a clearly identifiable cause. b. requires government intervention if efficiency is to be achieved. c. can be traced back to a principal-agent problem. d. is reciprocal in nature.
Under perfect capital mobility, fiscal policy has the largest impact on the income under:
a. fixed exchange rates. b. floating exchange rates. c. dollarization. d. a currency union.
If regulation imposes marginal cost pricing on a natural monopoly, then the monopoly will:
a. suffer persistent economic losses. b. earn a fair, but not excessive, return on its assets. c. produce too little output to achieve efficiency. d. experience diseconomies of scale.
Suppose the price level in Germany falls, ceteris paribus. This _________________ United States net exports, ultimately shifting the United States AD curve __________________
A) stimulates; rightward B) stimulates; leftward C) depresses; rightward D) depresses; leftward