The primary benefit of monetary exchange compared to barter exchange is:
a. the possibility of tracking trade for tax purposes
b. increased time devoted to finding trade partners.
c. increased time devoted to shopping for what we want.
d. increased efficiency in arranging transactions.
d
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Advocates of floating rates pointed out that
A) removal of the obligation to peg currency values would restore monetary control to central banks. B) imposing of the obligation to peg currency values would restore monetary control to central banks. C) removing of the obligation to peg currency values would restore fiscal control. D) imposing of the obligation to peg currency values would restore fiscal control. E) imposing of the obligation to peg currency would restore monetary control to the consumer.
Suppose a firm wants to build a new factory that would add pollution to an already polluted area. Under an offset program, the firm must:
a. install scrubbers and other government-mandated equipment. b. purchase pollution permits from the government. c. reduce or eliminate an old pollution source in the area. d. pay a tax which depends on the amount of pollution created.
Suppose $1 = 1.5 euros in London and $1 = 1.2 euros in New York. Which of the following would be the right trade for you to make money?
a. You sell 1,000 euros in London and buy euros in New York. b. You sell dollars in New York and buy dollars in London. c. You sell dollars in London and buy dollars in New York. d. You sell euros in London and buy dollars in New York.
Briefly explain the shape of the per-worker production curve in the Solow model. If investment per worker initially exceeds saving per worker, how is the steady-state capital-labor ratio achieved?
What will be an ideal response?