A trade-off of using monetary policy to maintain a pegged exchange rate
a. increases the power of the central bank.
b. always increases the interest rate.
c. cannot be used to address inflation or unemployment.
d. cannot be used to change tax policies.
c. cannot be used to address inflation or unemployment.
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Decision makers who try their best for rationality but are constrained by limited information and processing abilities are referred to as:
a. irrational. b. partially rational. c. boundedly rational. d. perfectly rational.
Which of the following would be most likely to cause the per capita income of less-developed countries to rise?
a. development of strong labor unions b. more rapid population growth c. investment expenditures that enhance the human capital of labor force participants d. an international minimum wage law
Gwen has decided to start her own photography studio. To purchase the necessary equipment, Gwen withdrew $2,000 from her savings account, which was earning 3% interest, and borrowed an additional $4,000 from the bank at an interest rate of 7%. What is Gwen's annual opportunity cost of the financial capital that has been invested in the business?
a. $60 b. $280 c. $340 d. $660
A perfectly straight Lorenz curve would mean:
A. perfect inequality, and it does not exist in the real world. B. perfect inequality, and is more common among the developing nations. C. perfect equality, and it does not exist in the real world. D. perfect equality, and is more common among the wealthy, developed nations.