Proponents of the flexible exchange rate system argue that under a fixed exchange rate system,
A) there is too great a chance that the exchange rate will diverge from the equilibrium exchange rate.
B) nations that experience persistent trade deficits might be tempted to impose trade barriers.
C) nations might sacrifice their domestic economic policy goals for the sake of maintaining the exchange rate.
D) b and c
E) a, b, and c
E
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The price elasticity of demand for Rosie's Roses fresh flowers the week of Valentine's Day is 1.10 and is 1.60 other days of the year. If Rosie's Roses faces a constant marginal cost of $0.75 per rose, what is the profit-maximizing peak-load price to charge the week of Valentine's Day?
A) $8.25 B) $2.00 C) $6.50 D) $11.00
Rising health care spending is a problem confronting the federal government because
A) it is the government's job to make sure everyone receives the health care they need. B) federal spending on health care has increased rapidly over the last thirty years. C) the federal-funded VA hospitals have been expanding faster than government revenues can provide for. D) the medical expenses of federal employees has been rising at a rate much faster than for non-federal workers.
The idea behind the traditional industrial policy of import substitution is:
A. to protect infant industries until they can become price competitive in the world market. B. give certain industries a chance to enter a market and gain efficiencies that companies elsewhere in the world have already gained in that industry. C. build up home industries to compete with others in the world. D. All of these statements are true.
When economists disagree about whether the government should tax a household's income or its consumption, they are expressing a difference in