Changes in which of the following will cause a change in exchange rates?
A) real interest rates
B) consumer preferences
C) perceptions of economic and political stability
D) all of the above
Answer: D
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In an economy with perfect capital mobility, if domestic interest rates are above world interest rates then
a. capital outflows will drive domestic interest rates down. b. capital inflows will drive domestic interest rates down. c. current account deficits will drive domestic interest rates down. d. the central bank will have to intervene even if exchange rates are floating.
If France is capable of producing either cheese or wine or some combination of those two products, then France should:
A. produce the one it is more efficient at producing. B. produce the one for which it has a comparative advantage. C. produce the one for which it has a higher opportunity cost. D. remain self-sufficient if it has the absolute advantage in the production of both.
Net exports
a. are the second largest component of total spending b. are already included in measures on consumption, investment, and government spending c. are a source of total spending on U.S. output d. are always positive; i.e., total exports always exceed total imports e. are always positive; i.e., total imports always exceed total exports
Refer to the table below for a monopolist. A non-discriminating monopolist would maximize profits at a price and quantity of:
The following question is based on the demand and cost data for a pure monopolist given in the table below.
A. $250 and 2 units
B. $200 and 3 units
C. $150 and 4 units
D. $100 and 5 units