All of the following are options a government can pursue to maintain a fixed exchange rate after exhausting its foreign exchange reserves, except
a. borrow foreign currencies from the IMF
b. impose import controls
c. impose exchange controls
d. change its exchange rate
e. lend foreign currencies to other countries
E
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Figure 4-17
Refer to . Suppose a price ceiling of $4.50 is imposed. As a result,
a.
there is a shortage of 15 units of the good.
b.
the demand curve will shift to the left so as to now pass through the point (Q = 35, P = $4.50).
c.
the situation is very much like the one created by a binding minimum wage.
d.
the quantity of the good that is bought and sold is the same as it would have been had a price floor of $7.50 been imposed.
In the short run, monopolistically competitive firms find their profit-maximizing quantity by setting price equal to marginal cost.
Answer the following statement true (T) or false (F)
Suppose that real interest rates increase. What would be the likely effect on household consumption and saving?
What will be an ideal response?