If the ATC curve has a positive slope, then the MC curve must be
A) horizontal.
B) vertical.
C) above the ATC curve.
D) below the ATC curve.
C
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In the case of purely flexible exchange rates, a decrease in domestic real income, with constant prices and domestic credit, will lead to
A) an increase in international reserves. B) the depreciation of the domestic currency. C) the appreciation of the domestic currency. D) no change in the value of the domestic currency.
Economics is a science that: a. typically uses controlled experiments to learn about consumer and firm behavior
b. uses models that cannot be tested empirically due to the complex nature of the economy. c. explores how choices are made between conflicting wants and desires in a world of scarcity. d. relies entirely upon normative analysis.
If fears of a terrorist attack are widespread and people lose faith in money, the economy could revert to a system of
a. cash and checks. b. double-entry bookkeeping. c. barter. d. financial intermediaries.
What will happen to the exchange rate between the British pound and the U.S. dollar if British prices increase?
What will be an ideal response?