In the late 1990s, Thailand, Malaysia, and Indonesia all experienced sharp declines in the value of their currencies; this resulted in economic instability and crisis. The collapse in the values of their currencies undermined their development by:
A. decreasing political instability.
B. decreasing population growth.
C. increasing corruption.
D. reducing investment.
Answer: D
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How do competitive firms try to achieve market power? What is one way they try to accomplish this?
What will be an ideal response?
A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in
A) a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium price. B) a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease. C) an increase in the equilibrium quantity of soft drinks; the equilibrium price may increase or decrease. D) a decrease in the equilibrium price of soft drinks and no change in the equilibrium quantity.
If the price of one good increases, and as a result the demand for another related good falls, the goods are
A) substitutes. B) normal goods. C) complements. D) inferior goods.
Suppose an industry has 100 firms, each with supply curve P = 50 + 10Q. Furthermore, suppose the market demand curve is given by P = 200 - 0.9Q. What is the industry supply curve?
A. P = 50 + 0.1Q B. P = -500 + 10P C. P = 50 + 10 Q D. P = 500 + Q