Under the Exchange Rate Mechanism of the European Monetary System, when the German mark depreciated below its lower limit against the British pound, the Bank of England was required to buy ________ and sell ________,
thereby ________ international reserves.
A) pounds; marks; losing
B) pounds; marks; gaining
C) marks; pounds; gaining
D) marks; pounds; losing
C
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Which is the most accurate statement?
A. The authority to run welfare programs resides mainly in the states. B. The authority to run welfare programs resides mainly in the federal government. C. When the 1996 welfare reform passed, it immediately removed 3 million people from the welfare rolls. D. The welfare reform law of 1996 will virtually abolish welfare by the year 2008.
Joe is the owner of the 7-11 Mini Mart, Sam is the owner of the SuperAmerica Mini Mart, and together they are the only two gas stations in town. Currently, they both charge $3 per gallon, and each earns a profit of $1,000. If Joe cuts his price to $2.90 and Sam continues to charge $3, then Joe's profit will be $1,350, and Sam's profit will be $500. Similarly, if Sam cuts his price to $2.90 and Joe continues to charge $3, then Sam's profit will be $1,350, and Joe's profit will be $500. If Sam and Joe both cut their price to $2.90, then they will each earn a profit of $900.In this situation, the Nash equilibrium yields a:
A. the same payoff that each would receive if each played his dominated strategy. B. lower payoff than each would receive if each played his dominant strategy. C. lower payoff than each would receive if each played his dominated strategy. D. higher payoff than each would receive if each played his dominant strategy.
According to the theory of purchasing power parity, the real exchange rate between two currencies will equal ________ in the long run.
A. 1 B. the ratio of the rates of inflation of the two currencies C. the nominal exchange rate D. 0
A rightward shift in the demand curve for product C might be caused by:
A. a decrease in the price of a product that is complementary to C. B. a decrease in income if C is a normal good. C. an increase in income if C is an inferior good. D. a decrease in the price of a product that is a close substitute for C.