other things constant, countries with higher investment rates will
What will be an ideal response?
tend to have higher incomes in the future
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When the Chairman of the Board of Governors explains in a television interview that the Fed hopes banks show more restraint in providing consumer credit because inflation is a problem, he is attempting to use
a. indirect theory instead of direct policy b. reason over passion in money matters c. selective media information d. moral suasion e. the paradox of thrift
Which of the following statements about the foreign exchange market is not true?
a. The exchange rate setting depends on the exchange rate regime a nation chooses. b. When a central bank intervenes in the foreign exchange market, it also affects the nation's monetary base. c. The elasticities of an economy's supply and demand for foreign exchange determine the exchange rate volatility. d. Flexible exchange rates increase the business risks associated with exchange rate movements. e. Fixed exchange rates decrease the business risks associated with changes in a nation's money supply.
Suppose a small island nation imports sugar for its population at the world price of $1,500 per ton. The domestic market for sugar is shown below.
With no subsidy, what is producer surplus?
A. $0 per day B. $1,000 per day C. $8,000 per day D. $4,000 per day
According to the output effect, a decrease in the wage will decrease production costs, so the price of final goods will decrease and the demand for labor will decrease.
Answer the following statement true (T) or false (F)