Define the two “pure” types of exchange-rate systems.
What will be an ideal response?
The two “pure” types of exchange-rate systems are flexible- and fixed-exchange-rate systems. A flexible-exchange-rate system is one in which the exchange rate is determined by the demand and supply of currencies and in which no government intervention occurs. A fixed-exchange-rate system is one in which the government determines exchange rates and is required to constantly intervene in the foreign exchange markets to maintain the value of its currency at the set rates.
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Refer to Figure 4-3. If the market price is $2.50, what is the maximum number of ice cream cones that Kendra will buy?
A) 1 B) 2 C) 3 D) 4
Unemployment that naturally occurs during the normal workings of an economy as people change jobs and move across the country is called:
A. natural unemployment. B. frictional unemployment. C. structural unemployment. D. cyclical unemployment.
In a market where firms are successful in convincing their customers that their product is different from their competitors' product but otherwise have no barriers to entry would be best characterized by
A) monopolistic competition. B) a monopoly. C) perfect competition. D) an oligopoly market.
When banks calculate the losses the institution would incur if an unusual combination of bad events happened, the bank is using the ________ approach
A) stress-test B) value-at-risk C) trading-loss D) maximum value