Differences among nations in real economic growth rates, real interest rates, and inflation rates will each affect the exchange rates among their currencies
a. True
b. False
Indicate whether the statement is true or false
True
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If the Fed sells foreign assets, the monetary base will
A) fall by the amount of the sale, only if the Fed buys domestic bank deposits with the proceeds. B) fall by the amount of the sale, only if the Fed buys domestic currency with the proceeds. C) fall by the amount of the sale, whether the Fed buys domestic bank deposits or domestic currency with the proceeds. D) rise by the amount of the sale.
If the wage rate rises, labor's share in the total costs of a production process
a. will increase. b. will decrease. c. may increase or decrease depending on the elasticity of demand for the product. d. may increase or decrease depending on the ease of substitution of other inputs for labor.
If an excise tax is placed on a product that has a perfectly inelastic demand, then: a. the entire tax will be paid by the consumer
b. the entire tax will be paid by the producer. c. the consumer and producer will each pay a share of the tax. d. the incidence of the tax cannot be determined unless we know the coefficient of price elasticity of supply. e. the tax is progressive.
Since resources are not equally substitutable across uses: a. the production possibilities curve will be positively sloped. b. the production possibilities curve will be a straight line
c. the production possibilities curve will be bowed outward. d. the production possibilities curve will be bowed inward.