Which of the following exchange rates between the dollar and the peso would a Mexican buyer of American goods most prefer?
A) $0.10 = 1 peso
B) $0.08 = 1 peso
C) $0.06 = 1 peso
D) $0.04 = 1 peso
A
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If tax rates are cut, one might expect to observe an increase in the budget deficit. Supply-siders question this observation, arguing that
A. this is a price that must be paid for a more equitable tax system. B. when taxes are cut, expenditures must also be cut. C. a decrease in the tax rate may actually generate an increase in tax revenues. D. tax wedges will make up the difference.
The demand curve for the product of a monopolist is
a. a straight horizontal line. b. identical to the market demand curve. c. identical to its MR curve. d. below its MR curve.
Social Security and Medicare are clear examples of
A) capitalism. B) market-determined services. C) market failures and externalities. D) governmental intervention in the market.
Which is not a serious disadvantage associated with freely fluctuating exchange rates?
A. Uncertainty which tends to diminish trade B. Greater instability in unemployment levels C. Longer lags in eliminating balance of payments surpluses or deficits D. Swings in the terms of trade related to currency appreciation or depreciation