As countries that currently use the euro, what are the two ways that Spain and Greece could reduce the prices of their exports and of their domestic goods to remain competitive with their trading partners?
What will be an ideal response?
1. They could lower inflation rates to below those of their major trading partners.
2. They could abandon the euro and allow their new currencies to depreciate against the euro.
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An unregulated, single-price monopoly is shown in the figure above. If fixed cost is $20, the monopoly's total costs when it is maximizing its profit will be
A) $30. B) $40. C) $80. D) $140.
If the expected path of interest rates on one-year bonds over the next five years is 2%, 4%, 3%, 2%, and 1%, the expectations theory predicts that the bond with the lowest interest rate today is the one with a maturity of
A) one year. B) two years. C) three years. D) five years.
Planned investment spending ________
A) is equal to planned fixed investment spending plus government investment B) is unrelated to the real interest rate C) is heavily influenced by expectations about the future D) all of the above E) none of the above
Capital gains taxes are taxes on the profits from the rising market value of investments
a. True b. False Indicate whether the statement is true or false