An overvalued exchange rate is an exchange rate:
A. at which the quantities of currencies demanded and supplied in the foreign exchange market are equal.
B. that equals the number of units of a foreign currency over the number of units of domestic currency.
C. that has an officially fixed value less than its fundamental value.
D. that has an officially fixed value greater than its fundamental value.
Answer: C
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The effect of trade on specialized employees of exporting industries will be ________ jobs and ________ pay because they are relatively ________
A) more; higher; immobile B) fewer; lower; immobile C) fewer; lower; mobile D) more; lower; immobile E) more; higher; mobile
According to supply-siders, an switch from consumption to savings by households will
a. lead to a permanent increase in output-per-worker. b. lead to a temporary increase in output-per-worker. c. lead to a decline in output-per-worker. d. not change output-per-worker.
Most students expect that if they spend more time studying, the outcome will be improved grades in the course. This supposes that: a. a positive relationship exists between studying and grades. b. a negative relationship exists between studying and grades. c. grades are independent variables
d. grades are not dependent variables.
When trade occurs among nations with similar tastes, technology, products, and costs, monopolistically competitive firms will have an incentive:
a. to lower prices to get new customers and increase market share. b. to raise prices to take advantage of a lucrative situation. c. to cut corners in manufacturing to boost profits. d. to raise quality, so they can charge a higher price than the competition.