Under the flexible exchange rate, lowering the price of a foreign currency will
A) allow the expansion of monetary policy without causing inflation.
B) decrease the foreign country's output.
C) prevent a foreign price increase from causing deflation at home.
D) cause a home price increase to be exported to the foreign markets.
E) cause a "beggar-thy-neighbor" effect.
A
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As the price of good X increases, the budget line
a. makes a parallel shift outward. b. makes a parallel shift inward. c. pivots inward. d. pivots outward.
Refer to the scenario above. Suppose the cost of advertising in this industry is very high and each company will incur a cost of $3 million annually if they choose to advertise. Which of the following is true in this case?
A) Company A's best response is to advertise if Company B advertises. B) Company B's best response is to advertise irrespective of what Company A does. C) Company A's dominant strategy is to advertise. D) This game does not have a dominant strategy equilibrium.
Looking ahead to how the shopkeeper is more likely to respond what price should the customer more likely to quote?
a. High price b. Low price c. Let the shopkeeper quote the price d. A compromised price between the high and the low
Classical economists believed that the economy would always return to full employment
a. True b. False