If inflation in Russia is higher than it is in Canada
A) the purchasing power of the ruble in buying Russian goods will rise relative to the dollar.
B) the value of the dollar will rise in the long run.
C) the value of the ruble will rise in the long run.
D) Both A and C are correct.
Ans: B) the value of the dollar will rise in the long run.
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Which of the following is not a valid criticism of discretionary fiscal policy? a. The implementation of fiscal policy is sometimes difficult
b. Time lags in fiscal policy are long. c. Fiscal policy works only during periods of stagflation. d. Fiscal policy often affects only current income, but many economic decisions are made on the basis of permanent income. e. Fiscal policy might have undesirable long-term effects on aggregate supply.
If the equilibrium price of corn is 20 cents an ear and the government imposes a floor of 30 cents an ear, the price of corn will ______________________.
A. increase to 30 cents B. remain at 20 cents C. rise to about 25 cents D. be impossible to determine
Which of the following is adverse selection?
a. the risk associated with selecting stocks in only a few specific companies b. the risk that a person will become overconfident in his ability to select stocks c. a high-risk person being more likely to apply for insurance d. after obtaining insurance a person having less incentive to be careful
The alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology are known as
A. Nominal GDP. B. Production possibilities. C. Consumption possibilities. D. Real GDP.