The economic system that answers the What, How and For Whom questions by central authority is a:
a. market economy. b. command economy
c. traditional economy. d. any of these
b
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If the exchange rate changes from 1.10 euros per dollar to 1.00 euro per dollar, the dollar has
A) depreciated against the euro. B) appreciated against the euro. C) fallen inversely in value. D) appreciated against the dollar. E) depreciated against the dollar.
Based on the following information, what is the balance on the current account?
Exports of goods and services = $5 billion Imports of goods and services= $3 billion Net income on investments = -$2 billion Net transfers = -$2 billion Increase in foreign holdings of assets in the United States = $4 billion Increase in U.S. holdings of assets in foreign countries = -$1 billion A) -$2 billion B) $1 billion C) $3 billion D) $4 billion
Higher consumer prices caused by external forces would boost the wage costs of firms without any commensurate increase in the nominal demand for their products if
A) long-term contracts were in force. B) all labor contracts were one year in duration. C) there were no COLAs. D) there were full COLA protection.
When a price shock occurs, the inflation rate is affected ________
A) only in the period of the price shock B) only in the period after the price shock C) only if the price shock causes a change in output D) only if the price shock persists for more than one period E) none of the above