In an economy with a fixed exchange rate, an increased demand for foreign goods would increase the supply of local currency, and the government would have to buy:
A. foreign currency in the foreign exchange market to prevent the domestic currency from depreciating.
B. foreign currency in the foreign exchange market to prevent the domestic currency from appreciating.
C. local currency in the foreign-exchange market to prevent the currency from depreciating.
D. local currency in the foreign-exchange market to prevent the currency from appreciating.
Answer: C
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The most reliable measure of market concentration is:
a. the Cost of Living index. b. the Herfindahl-Hirschman index. c. the Market index. d. the Market-Value weighted index. e. the Wholesale Price index.
Gross domestic product is
What will be an ideal response?
While waiting in line to buy one cheeseburger for $1.50 and a medium drink for $1.00, Sally notices that she could get a value meal that contains both the cheeseburger and medium drink and also a medium order of fries for $2.75. She thinks to herself, "Is it worth the extra 25 cents to get the medium fries?" To an economist, Sally's decision is an example of:
A. marginal analysis. B. basing decisions on total, rather than marginal, value. C. an unintended consequence. D. the fallacy of composition.
GDP is the total market value of all final goods and services produced in a given time period within a nation's borders.
Answer the following statement true (T) or false (F)