At any given moment there is one exchange rate:
a. for all the world's currencies
b. for currencies in the free world.
c. between every pair of currencies.
d. established by the Federal Reserve System.
c
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Refer to the graph below for a natural monopoly. Assume the demand for the natural monopoly is originally D1. Now suppose a second firm enters the market and the demand for each firm becomes D2. The result will be
a. profit to rise for both firms.
b. profit to fall for the original natural monopoly firm and a profit to be earned by the new second firm.
c. profits to continue to be enjoyed by the original natural monopoly but a loss for the new second firm.
d. losses for both firms.
According to Adam Smith, the "invisible hand" refers to which of the following?
a. The "best interests of society (public interest) will occur as an outcome of the market process coordinating the self-interested interactions of buyers and sellers (private interest). b. Government interference is the invisible hand of inefficiency. c. Bribes and graft is the invisible hand of inefficiency. d. The "best interests of society" will occur as an outcome of careful guidance by government authorities in allocating scarce goods and services.
An underground economy:
a. is a market where transaction occurs under the ground. b. is a market where the buyers and sellers make transactions without the government’s approval. c. is a market where the buyers and sellers make transactions with the government’s approval. d. is a market that is international in scope and fully authorized to conduct business.
If investment opportunities in the U.S. become more attractive to foreigners,
a. the exchange-rate value of the dollar will fall. b. the current-account balance will shift toward a deficit. c. the capital inflows to the U.S. will fall. d. all of the above are true.