With fixed exchange rates, a country
A) cannot conduct independent monetary policy.
B) can conduct independent monetary policy.
C) cannot conduct independent fiscal policy.
D) Both A and C.
A
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Between August 2007 and July 2008, Brazil exported more than 3.5 billion pounds of coffee to the rest of the world. Suppose the Brazilian government subsidizes the export of coffee by $0.42 per pound
Which of the following would be an outcome of this subsidy? A) Brazilian producers experience an increase in producer surplus. B) Brazilian consumers experience an increase in consumer surplus. C) Producers from the rest of the world experience a gain in producer surplus. D) Brazilian coffee exports would decrease.
Refer to Figure 11.1. Assume the economy is in equilibrium at 1 = 0. Other things equal, a negative demand shock such as the financial crisis of 2007-2009 would result in a movement from point ________ to point ________
A) A; B B) B; A C) A; C D) A; D
Which of the following does the long-run Phillips curve tell us?
a. That the Fed can select any rate of unemployment it wants in the long run b. That the Fed can select any rate of inflation and unemployment rate it wants in the long run c. That the Fed can select neither the rate of inflation nor the rate of unemployment in the long run d. That there is a tradeoff between the rate of inflation and the rate of unemployment in the long run e. That the Fed can select any rate of inflation it wants in the long run
Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each. An accountant would calculate the total cost for one birdhouse to be
a. $5. b. $8. c. $9. d. $13.