When currencies are viewed as assets, the price of a currency is its:
a. interest rate.
b. exchange rate.
c. inflation rate.
d. growth rate.
Ans: b. exchange rate.
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A worker has a marginal product of 15 units a day, each of which can be sold for $10. Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer
What will be an ideal response?
If, in 2000, $1 = 1.5 euros, and in 2007, $1 = 0.9 euros, which of the following statements would be TRUE?
a. More American tourists will find it cheaper to travel to Europe. b. More Europeans will stay home as visits to the United States become more expensive. c. Europeans will import fewer products from the United States. d. Americans will import fewer products from Europe.
A person who discovers that he/she has advanced stages of cancer and calls his/her life insurance agent to double his/her insurance policy is an example of:
A. the problem of information symmetry. B. a moral hazard risk. C. the risk of adverse selection. D. risk spreading.
Clustering: a. occurs when government resources are diverted toward one particular sector of the economy
b. takes place when new firms enter regions already thick with other firms in the same or similar industries. c. occurs when there is a single firm in the economy that can charge different prices for the same product. d. implies that consumers with similar tastes and preferences tend to stay in the same region. e. occurs when all the firms in the industry sell identical commodities and charge identical prices for these commodities.