The difference between nominal and real exchange rates is:
A) absolute prices.
B) foreign prices.
C) domestic prices.
D) ratio of domestic prices to foreign prices.
D
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Suppose a cost function is TC = Aq3 + bq2 + cq + d. Then the average total cost is
a. Aq2 + bq + cq +d/q b. Aq2 + bq + c c. Aq3 + bq2 + cq d. d
Which of the following properties hold true for the equilibrium price-quantity combination?
a. Buyers who are willing to pay higher than the equilibrium price do not find sellers. b. At the equilibrium price producer surplus equals consumer surplus. c. The equilibrium output is produced at the lowest avoidable cost. d. The equilibrium output is produced at the lowest opportunity cost.
If the MPC is 0.75, and the government cuts spending by $100b, the overall effect on GDP will be:
A. a decrease of $400b. B. an increase of $250b. C. a decrease of $250b. D. an increase of $400b.
According to Adam Smith, what role does individual self-interest play in directing human activity?
What will be an ideal response?