What all is assumed constant when looking at the demand curve of any foreign exchange transaction between the dollar and any other currency?
a. the incomes and preferences of U.S. consumers
b. expected inflation in the United States
c. interest rates in the U.S.
d. all of the above are assumed constant
d
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Firm A producing one good acquires another firm B producing another good. Price elasticity of demand for Firm A's good is -1.8 and Firm's B is -1.8 . Holding other things constant and assuming both goods are substitutes, the acquiring firm should
a. Raise prices on both goods with a larger increase in Firm A's good b. Raise prices on both goods with a larger increase in Firm B's good c. Raise prices on both goods by the same amount d. Lower prices on both goods
Assuming the economy is represented by the graph shown, if the government were to enact a partially successful expansionary fiscal policy, it would be most likely to move from equilibrium:
A. A to B.
B. B to A.
C. D to C.
D. D to B.
Since the current tax system is fairly ineffective at redistributing income, some people think this indicates
A. Government failure. B. A negative Gini coefficient. C. Market failure. D. A problem with externalities.
The aggregate quantity of goods and services demanded changes as the price level falls because
a. real wealth falls, interest rates rise, and the dollar appreciates. b. real wealth falls, interest rates rise, and the dollar depreciates. c. real wealth rises, interest rates fall, and the dollar appreciates. d. real wealth rises, interest rates fall, and the dollar depreciates.