If there is a permanent increase of 5% in the domestic money supply, then which of the following will be true in the long run?
a. Prices will decrease by 5%.
b. Prices will increase by 4%.
c. The home country currency will depreciate by 5%.
d. The home country currency will appreciate by 4%.
Ans: c. The home country currency will depreciate by 5%.
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In an economic model, an exogenous variable is
A) a stand-in for more complicated variables. B) determined by the model itself. C) determined outside the model. D) a variable that has no effect on the workings of the model.
Suppose technical change permits cable television companies to provide their services at lower rates. The share-the-gains, share-the-pains theory would predict that the regulators would
A) permit the firms to keep the savings and would lower prices only if the firms were pressured to do so. B) force the firms to pass all the savings on to consumers in the form of lower prices. C) force the firms to pass the savings on to consumers in the form of better service. D) force the firms to pass some of the savings on to consumers and to permit the firms to keep some of the savings themselves.
The above table depicts output from a firm that manufactures computers. The computers sell for $1,000 each. What is the marginal revenue product (MRP) for the fourteenth worker per week?
A) 90 units B) 80 units C) $70,000 D) $60,000
Which of the following is the best definition of the labor force participation rate?
a. the number of people age 16 and over who are available for employment b. the percentage of the population age 16 and older who are willing and able to work but are unable to obtain a job c. the percentage of the working-age population in the labor force d. the percentage change in the employed level from one year to the next