Under a floating exchange-rate regime, following an expansion in the country's money supply, the country's monetary authority
A. must buy foreign currency in the foreign exchange market.
B. may not intervene in the foreign exchange market.
C. will be forced to reverse the monetary expansion.
D. must buy domestic currency in the foreign exchange market.
Answer: B
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If oil prices decrease,
A) the short-run aggregate supply curve will shift down. B) the long-run aggregate supply curve will shift to the left. C) the short-run aggregate supply curve will shift up. D) the long-run aggregate supply curve will shift to the right.
A resident of the U.S. just purchased a share of stock on the London stock market. As far as the U.S. balance of payments this purchase will
A) have no influence on the balance of payments since stock is not a good or service. B) be entered as a unilateral transfer in the current account. C) be entered in the capital account. D) require special drawing rights.
When income taxes fall, the supply of labor curve shifts rightward, ultimately leading to the LRAS curve shifting rightward (economic growth)
Indicate whether the statement is true or false
Suppose the average total cost of producing semiconductors in a factory of a particular size declines over time as more semiconductors are produced. This drop in average total cost might best be explained by:
A. economies of scope. B. economies of scale. C. diminishing marginal productivity. D. learning by doing.