Balance of payments surpluses arise whenever the exchange rate is pegged at an artificially low level.
Answer the following statement true (T) or false (F)
True
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Your neighbor likes to blast 1970's rock music and the louder the better. The loud music imposes a cost on you because it disrupts your study of economics. Let D stand for the volume of his music in decibels, B for his benefits and C for your costs, where B and C are measured in dollars. For any given volume, D, your neighbor's benefit is B = 0.63D - 0.002D2 and your cost is C = 0.06D + 0.001D2. What is the efficient Pigouvian tax?
A. $0.75 per decibel B. $0.29 per decibel C. $0.24 per decibel D. $0.25 per decibel
Two items which have a negative cross price elasticity of demand are referred to as
A) luxury goods. B) inferior goods. C) substitutes. D) complements.
The Fed is dependent upon government policy, as witnessed by its actions in the early and mid-1980s
Indicate whether the statement is true or false
In the long run, firms in a monopolistically competitive market operate:
A. at less than full capacity. B. on an efficient scale. C. at lowest average total costs possible. D. at full capacity.