Under a system of fixed exchange rates, what happens if a country's currency is undervalued?
A. The exchange rate falls.
B. The currency depreciates.
C. The central bank loses official reserve assets.
D. The central bank gains official reserve assets.
Answer: D
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Which of the following is a fixed cost?
A. Electricity B. Worker bonuses C. Mortgage on the building D. Steel to produce refrigerators
If demand is unit-elastic, then a $5 decrease in price will lead to an increase in quantity demanded by 5 units
a. True b. False Indicate whether the statement is true or false
Among the most important supply side factors explaining homes prices would be the
A. size of the metropolitan area and the cost of land. B. size of the metropolitan area. C. cost of land. D. size of the homebuyer's car.
The Congressional Budget Office reported that federal budget deficits in the United States were likely to increase in future years, and these higher deficits might "pose a threat to the economy by crowding out business investment and threatening a
spike in interest rates." This higher budget deficit would be represented graphically by A) a shift in the supply curve for loanable funds to the right. B) a movement to the right along the supply curve for loanable funds. C) a shift in the supply curve for loanable funds to the left. D) a movement to the left along the supply curve for loanable funds.