Refer to the table. The equilibrium dollar price of libras is:
Answer the question on the basis of the following table, which indicates the dollar price of libras, the currency used in the hypothetical nation of Libra. Assume that a system of freely floating exchange rates is in place.
A. $5.
B. $4.
C. $3.
D. $2.
B. $4.
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Under a system of flexible exchange rates, a decrease in demand for a nation's currency in the foreign exchange market will: a. make it less expensive for foreigners to buy the nation's goods
b. make it more expensive for the nation to import goods. c. cause the nation's balance on current account to shift toward a deficit. d. all of the above
Which of the following is true of investment spending? a. It depends on perceptions about future economic conditions
b. It increases as the current level of real gross domestic product increases. c. As the expected rate of return on investment spending decreases, the investment spending function shifts upward. d. As the real interest rate decreases, the investment spending function shifts downward.
Which of the following statements is an example of a positive, as opposed to normative, statement?
a. Americans deserve a cleaner environment. b. Reducing emissions reduces days missed from school due to asthma. c. All Americans are entitled to quality health care. d. Economic policies should focus on improving equality.
Suppose a factory that produces toasters experiences a decline in its average total cost with no change in its output level. This decline might be explained by:
A. economies of scale. B. technological change. C. decreasing marginal utility. D. increasing marginal productivity.