The buying and selling of foreign currency by the central bank is a trade policy whose objective is:

A. reducing purchases of assets abroad.
B. stabilizing the exchange rate against external shocks.
C. stabilizing the interest rate against foreign capital outflows.
D. promoting long term economic growth.


Answer: B

Economics

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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 

A. D; C B. B; C C. B; A D. D; B

Economics

The quantity supplied of a good or service is the

A) quantity produced at one price. B) one quantity produced at a variety of prices. C) list of all quantities at different prices, as illustrated by a supply schedule and a supply curve. D) list of all quantities at different prices, as illustrated by a demand schedule and a demand curve.

Economics

A key difference between a monopoly and a perfectly competitive firm is that the monopolist

A) does not face fixed costs in the short run. B) has a marginal revenue curve that lies below its demand curve. C) has no marginal cost curve. D) faces a perfectly elastic demand for its product.

Economics

Firms in a monopolistically competitive market face ________ demand curves and earn ________ economic profits in the long run

A) downward sloping; zero B) downward sloping; positive C) horizontal; zero D) horizontal; negative

Economics