In a fixed exchange rate system
A) market forces and the country's stock of gold determine its exchange rate.
B) a central bank affects the value of a currency by changing its foreign exchange reserves.
C) market forces play a role in determining the fixed value of a currency.
D) the International Monetary Fund determines exchange rates.
Answer: B
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Deciding to engage in tax evasion requires consideration of all of the following, except the
A. probability of being caught. B. probability of conviction if caught. C. probability of winning extra money. D. costs of defending oneself.
Speculative attacks against a currency are caused by fears of:
A. monetary policy tightening. B. exchange rate revaluations. C. exchange rate devaluations. D. balance-of-payments surpluses.
In a pure coordination game, as long as the players coordinate on an outcome, it does not matter what that outcome is
Indicate whether the statement is true or false
Which of the following is an example of a way in which an oligopolistic firm can escape the prisoner's dilemma?
A) advertising that it will match its rival's price B) ignoring the pricing decisions of the other firms C) producing more of its product D) reneging on a previous tacit agreement with rival firms to charge identical high prices