When an exchange rate is determined strictly by the demands and supplies for a nation's currency, it is called
a. fixed
b. arbitrage
c. floating
d. unilateral
e. balance of payments
C
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Refer to the above figure. Suppose that the economy starts at AD1. If the government reduces taxes, then the economy goes to AD2, but then falls back to AD3. This is an example of
A) complete crowding-out effect. B) partial crowding-out effect. C) Ricardian equivalence. D) laissez-faire.
Suppose we want to use game theory to analyze how an oligopolist selects its optimal price. The cells of the payoff matrix show
A) the strategy that a firm must pursue to earn various levels of profit. B) the profit that each producer can expect to earn by pursuing a single strategy. C) the expected profits of rival firms. D) the profit that each producer can expect to earn from every combination of strategies by the firms in the market.
Under a fixed exchange rate system, at high domestic real interest rates net capital outflows are ________, so the central bank ________ foreign-exchange reserves
A) positive; acquires B) positive; loses C) negative; acquires D) negative; loses
Describe what happens to quantity of labor supplied when wages are at the equilibrium level, above equilibrium, and below equilibrium.
What will be an ideal response?