Government policy that decreases the value of its currency _________
a. is called devaluation
b. is called an import control
c. appreciates the exchange rate
d. is helpful to importers
e. is harmful to exporters
A
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The market price of the product produced by Jones Inc, is $6 per unit, which is higher than the average cost of $4 per unit at the profit maximizing output level. The average variable cost of production is $3.5 per unit. If demand for its product declines due to introduction of cheaper substitutes and the market price of the product falls to $3.8 per unit, which of the following statements will
be true? a. The firm will close down in the short run. b. The firm will continue production as long as the market price is above average variable cost. c. The firm will continue production as long as the market price exceeds fixed cost. d. The firm will minimize it losses by producing where average variable cost equals $3.8.
Which of the following statements best represents the attitude of a consumer with a very inelastic demand toward various brands of coffee?
A. "All the brands are exactly the same. I always buy the cheapest." B. "Coffee is coffee; one brand is as good as the rest." C. "My brand is so superior to the rest of the brands that I'm willing to pay a bit more for it." D. "With my limited budget my favorite brand is usually the 'what's on sale' brand."
The Fisher effect ________
A) comes from combining the Fisher equation and the classical dichotomy B) predicts that in the long run nominal rates will rise with increases in expected inflation C) shows that in high inflation we typically see high nominal interest rates D) all of the above E) none of the above
Unemployment and inflation are important determinants of short-run material welfare, whereas productivity growth is an important determinant of long-run material well-being.
Answer the following statement true (T) or false (F)