A Stronger U.S. dollar in world exchange markets means that
A. a dollar buys fewer units of foreign currency than it could before.
B. foreigners buy the same amount of U.S. dollars as they have.
C. a dollar buys the same amount of foreign currency than it could before, with gold backing up the value of the dollar.
D. a dollar buys more units of foreign currency than it could before.
Answer: D
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Suppose in Belgium, the opportunity cost of producing a trombone is 8 clarinets. In Denmark, the opportunity cost of producing a trombone is 6 clarinets
a. What is the opportunity cost of producing a clarinet for Belgium? b. What is the opportunity cost of producing a clarinet for Denmark? c. Which country has a comparative advantage in the production of clarinets? d. Which country has a comparative advantage in the production of trombones?
The above figure shows supply and demand curves for milk. If the government passes a law that establishes $3 per month as the legal minimum per gallon price, consumer surplus will be
A) a. B) a + b + f. C) a + b + c. D) c + d + g.
Analysis indicates that the economy is in a recessionary gap. Which of the following is the most appropriate policy mix in this situation?
a. a budget surplus and expansionary monetary policy b. a budget deficit and expansionary monetary policy c. a budget deficit and contractionary monetary policy d. a budget surplus and contractionary monetary policy
Which of the following is the best example of a supply shock?
a. an increase in the availability of capital and machinery due to normal changes in business investment b. a decrease in the productivity of the labor force due to a decline in the average educational level of workers c. a decline in agricultural output due to a summer drought d. an increase in output as a result of an expansion in employment