Figure 19-3
?
Of the graphs in Figure 19-3, where the dotted line shows the actual exchange rate, which one shows a country with an undervalued currency and a balance of trade surplus?
A. 1
B. 2
C. 3
D. 4
Answer: B
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A) the expected future marginal product of domestic capital rises. B) the expected future marginal product of foreign capital rises. C) there is a temporary positive domestic supply shock. D) there is a temporary negative domestic supply shock.
Optimal decisions are made on the basis of
A. rate of growth in total profit. B. average cost and average revenue figures. C. impact on market share. D. marginal cost and marginal revenue figures.
According to the Laffer curve, increases in the tax rate will lead to a(n)
A) steady decrease in tax revenues. B) steady increase in tax revenues. C) initial decrease in tax revenues and then an increase in tax revenues. D) initial increase in tax revenues and then a decrease in tax revenues.
Despite the elimination of the federal budget deficit in the late 1990s, the trade deficit increased due to
a. increased household saving. b. decreased household saving. c. a depreciation of the dollar. d. an increase in inflation rates.