The long run supply curve for a constant cost industry is:
a. horizontal.
b. upward sloping.
c. vertical.
d. downward sloping.
a
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A contractionary monetary policy causes
A) higher interest rates, which increases the foreign demand for U.S. financial instruments, which causes interest rates to decrease. There is no effect on net exports. B) higher interest rates, which decreases the foreign demand for U.S. financial instruments, raising the international price of the dollar and increasing net exports. C) higher interest rates, which increases the international price of the dollar and decreases net exports. D) lower interest rates, which decreases the foreign demand for U.S. financial instruments, raising the international price of the dollar and increasing net exports.
Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund
A) make loans to the riskiest nations so that private investors will not be tempted to take a risk. B) impose tougher preconditions on borrowers. C) not make loans to risky nations because there is a high demand for funds from safer nations. D) loan only to countries that have free elections.
If the European Central Bank increases interest rates
A) the demand curve for European euros shifts rightward and the supply curve of European euros shifts leftward. B) the demand curve for European euros shifts leftward and the supply curve of European euros shifts rightward. C) the demand curve for European euros and the demand curve for U.S. dollars both shift rightward. D) the demand curve for European euros shifts leftward and the demand curve for U.S. dollars shifts rightward.
The actual incidence (or burden) of a tax refers to
a. the governmental agency responsible for collecting the tax. b. who actually bears the burden of a tax once changes in market prices are taken into account. c. the degree of progressiveness in the rate structure of the tax. d. who the tax is legally or statutorily imposed on.