A country will have a balance-of-payments deficit when its exchange rate:
A. is flexible.
B. is overvalued.
C. equals the market equilibrium value.
D. is undervalued.
Answer: B
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Use the following graph showing short-run cost curves for a perfectly competitive firm to answer the next question.
At what minimum price would the firm be willing to produce output in the short run?
A. P1 B. P2 C. P3 D. P4
Exports of U.S. goods create a ________ U.S. dollars and create a ________ foreign currencies
A) demand for; demand for. B) supply of; supply of C) demand for; supply of D) supply of; demand for
If an investor thinks interest rates are likely to rise, she would:
A. sell her bonds and hold more money. B. buy more bonds now and hold less money. C. not change her money holdings at all. D. not alter her bond portfolio until interest rates actually rise.
As a consumer moves down one of her indifference curves, her satisfaction:
a. falls. b. rises. c. remains unchanged. d. first falls, then levels out.