Equity and efficiency can be achieved simultaneously through competition
Indicate whether the statement is true or false
False. Equity involves value judgments and achieving it will usually result in lessened efficiency.
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Suppose we were analyzing the Turkish lira per euro foreign exchange market. If The Euro-Area's interest rate falls relative to Turkey and nothing else changes, then the:
a. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing an appreciation of the euro. b. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market rises, causing an uncertain change in the value of the euro. c. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing a depreciation of the euro. d. The supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market rises, causing an appreciation of the euro. e. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.
When playing a game, a mixed strategy refers to
A) randomly selecting a strategy. B) consistently alternating between two strategies each time a game is played. C) never playing the same strategy twice in a row. D) never playing the same strategy more than once.
If the Chinese government sets a price ceiling below the equilibrium price, the result will be to
A) increase total surplus. B) create deadweight loss. C) increase surplus and create deadweight loss. D) eliminate deadweight loss.
Explain two ways by which the Federal Reserve System can increase the monetary base. Why is the effect of Federal Reserve actions on bank reserves less exact than the effect on the monetary base?
What will be an ideal response?