Why would a member of a cartel cheat?
What will be an ideal response?
After setting a common price or production quotas, a member of a cartel can earn more profits individually by "cheating": setting a slightly lower price than the cartel price and producing and selling more output than specified under the cartel agreement.
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Which of the currencies below does not serve a role as an international reserve currency?
A) European euro B) Japanese yen C) U.S. dollar D) Mexican peso
Neutral technical progress allows a firm to
A) produce more output with the same inputs. B) use less capital to produce more output. C) use less labor to produce more output. D) produce the same amount of output with the same inputs.
Which of the following could increase the supply of dollars in the foreign exchange market?
a. a lower inflation rate in foreign countries than in the U.S. b. lower interest rates in foreign countries than in the U.S. c. higher prices in the United States d. a depreciation of other currencies e. an appreciation of the dollar
The exchange rate is determined by the interaction of the supply and demand for currencies in which exchange rate system? is:
A) fixed. B) flexible. C) all of the above. D) none of the above.