To maintain a fixed exchange rate, authorities
A) make laws stipulating the exchange rate.
B) modify money supply.
C) modify government expenses.
D) modify taxes.
B
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Suppose that 50 hot dogs are demanded at a particular price. If the price of hot dogs rises from that price by 5 percent, the number of hot dogs demanded falls to 48 . Using the midpoint approach to calculate the price elasticity of demand, it follows that the
a. demand for hot dogs in this price range is unit elastic. b. price increase will decrease the total revenue of hot dog sellers. c. price elasticity of demand for hot dogs in this price range is about 1.22. d. price elasticity of demand for hot dogs in this price range is about 0.82.
The monetary base is the sum of:
A. currency in the hands of the public M1. B. currency in the hands of the public and M2. C. reserves and currency in the hands of the public. D. reserves and M2.
Which of the following is a belief of the monetarists?
A. They think the Great Depression was made worse by poor conduct of monetary policy. B. They believe monetary policy is transmitted to the economy only through its effect on interest rates and planned investment. C. They believe that the interest-investment curve is horizontal. D. They believe the crowding-out effect is insignificant.
The effect of a tariff
A. can lead to economies of scale for firms inside the nation. B. can lead to a monopoly when domestic firms become the sole suppliers inside the nation. C. will be more beneficial to large firms than to small firms. D. is negligible since it applies to firms outside the nation.