A citizen in a developing country with a currency policy of convertibility on the current account could engage in all of the following transactions except:
A. sell foreign currency resulting from the exports of manufactured t-shirts.
B. sell foreign currency resulting from the sale of a U.S. treasury bond.
C. purchase foreign currency in order to import a BMW.
D. purchase foreign currency in order to purchase a U.S. treasury bond.
Answer: D
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If foreign firms send profits back to their industrial countries from the developing countries, developing countries will have a larger deficit on their balance of payments accounts
a. True b. False Indicate whether the statement is true or false
The lime drinks industry and the cola drinks industry are both operating as oligopolies. The two firms in the lime drinks industry agree to form a cartel, while the three firms in the cola drinks industry are unable to come to an agreement. In the given scenario, which of the following statements is true?
a. The producers of lime drinks will share monopoly profits, while the producers of cola drinks will have profit levels typical of competition. b. The producers of lime drinks will have the profit levels of monopolistic competitors, while the producers of cola drinks will eventually have zero profits. c. The producers of lime drinks will eventually have zero profits, while the producers of cola drinks have the profit levels of perfect competitors. d. The producers of lime drinks will have profit levels like perfect competitors, while the producers of cola drinks will share monopoly profits.
(Appendix) Which of the following production functions exhibits increasing returns to scale?
A. Q = Kl/2L2/3 B. Q = Kl/4Ll/3 C. Q = K/L D. Q = K1/2Ll/2
The total output of a firm will be at a maximum where:
A. AP is at a maximum. B. MP is zero. C. AP is at a minimum. D. MP is at a maximum.