Which of the following statements is not true of fixed and flexible exchange rate systems?
a. Under fixed exchange rates, government officials have little direct role in the foreign exchange market.
b. Under fixed exchange rates, the government must select an appropriate exchange rate.
c. Under fixed exchange rates, active central bank intervention is necessary to maintain the fixed exchange rate.
d. Under fixed exchange rates, the governments must stand ready to buy all foreign exchange offered to it and supply all foreign exchange demanded from it.
e. Flexible exchange rates rely on market forces to set the exchange rate, but fixed exchange rates are set by central banks.
A
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Maria helps tutor students taking economics. The equilibrium price for tutoring is $15 per hour
Maria has determined her opportunity cost per hour to be $6 for the first, $9 for the second, $12 for the third, $15 for the fourth, and $18 for the fifth. How many hours will Maria tutor? Why this amount of hours? What, if any, is Maria's producer surplus?
The major contributor to the long-run improvement of a country's standard of living is
A) low inflation. B) growth in government. C) population growth. D) technological progress.
No matter what banks do, when the legal reserve requirement is 20 percent, the potential money multiplier is
a. 0.2 b. 1.2 c. 2 d. 2.5 e. 5
Explain why the curve between A and B looks different than the curve from A to C. Provide an example of how a firm could opt to follow the A to C curve instead of the A to B curve.
What will be an ideal response?