Which of the following is true? If a central bank runs out of reserve assets, then:
a. Actually, it is impossible for a nation to run out of reserve assets because the central bank could always print more money to increase it.
b. It cannot intervene in the foreign exchange market to raise the value of the nation's currency.
c. It must fix its exchange rate to a strong currency because the central bank can no longer allow the currency to fluctuate.
d. The central bank must borrow from its Treasury to increase the nation's reserve assets.
e. It cannot intervene in the foreign exchange market to lower the value of the nation's currency.
.B
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If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then the marginal cost of producing the 5th necklace is $50
Indicate whether the statement is true or false
In Massachusetts, the price elasticity of license plates is 3.5 and their price is $50. Massachusetts is:
A. not maximizing revenue since elasticity is greater than 1 and revenue will decrease after a price decrease when demand is elastic. B. not maximizing revenue since elasticity is greater than 1 and revenue will increase after a price decrease when demand is elastic. C. maximizing revenue since elasticity is greater than 1 and revenue will decrease after a price decrease when demand is elastic. D. maximizing revenue since elasticity is greater than 1 and revenue will increase after a price decrease when demand is elastic.
If a 10 percent rise in price leads to a reduction in quantity demanded of more than 10 percent,
A. demand is elastic. B. demand is inelastic. C. elasticity of demand is unitary. D. None of the above is correct.
Which of the following is not an abstraction of macroeconomics?
A. Inflation rate B. Total costs C. Unemployment D. Aggregate supply