Suppose the government of South Island fixes the exchange rate of its currency, the Islandia, in terms of the U.S. dollar. Initially the exchange rate is set at $1 per Islandia. Later the government changes the exchange rate to $2 per Islandia. This is an example of a(n):
A. appreciation
B. devaluation
C. depreciation
D. revaluation
Answer: D
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Which of the following correctly describes "frictional unemployment"?
A) Frictional unemployment falls in recessions and rises in expansions. B) Frictional unemployment occurs mainly during recessions. C) Frictional unemployment includes only people who are job losers. D) Frictional unemployment is a normal occurrence in a growing economy. E) Frictional unemployment includes only people who are job leavers.
The difference between the marginal benefit from a new pair of shoes and the price of the new pair of shoes is
A) the consumer surplus from that pair of shoes. B) what we get. C) what we have to pay. D) the price when the marginal benefit is maximized. E) the consumer's expenditure on the shoes.
Unions
a. raise the wages of unionized workers and raise unemployment. b. raise the wages of unionized workers and reduce unemployment. c. reduce the wages of unionized workers and raise unemployment. d. reduce the wages of unionized workers and reduce unemployment.
Using a graph, explain how an increase in technology will affect the equilibrium price and quantity of DVD players. Again using a graph, explain what happens in the market for video cassette recorders.
What will be an ideal response?