What is a crawling peg and how does it work?
What will be an ideal response?
A crawling peg exchange rate policy selects a target path for the exchange rate and then uses direct central bank intervention in the foreign exchange market to achieve that path. A crawling peg works like a fixed exchange rate except that the central bank changes the target value of the exchange rate in accord with its target path.
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Everything else equal, if the dollar appreciates against the Chinese yuan:
A) China will stop trading with the U.S. B) China will export more to the U.S. and will import less from the U.S. C) the Chinese government will sell yuan in the foreign exchange market. D) China will import more from the U.S. and will export less to the U.S.
Refer to the scenario above. What is the change in total revenue due to the price reduction?
A) The total revenue increases by $25. B) The total revenue increases by $50. C) The total revenue decreases by $105. D) The total revenue decreases by $175.
Nonexcludability is a matter of degree. As the cost of excluding individuals rises, _____
a. the marginal cost of provision increase b. the marginal cost of provision decreases c. the probability of free riding declines d. the probability of free riding increases
If the demand for hamburgers increases, it is likely that the demand for fast-food employees will
A) increase. B) decrease. C) stay the same. D) increase at first but then fall rapidly.