One reason a country might choose a fixed exchange rate is
A) to reduce inflation and promote a stable economic environment.
B) to reduce the impact of economic shocks.
C) to rid themselves of the pressure of monetary management.
D) that it is easier for all citizens to understand.
A
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The Consumer Price Index (CPI) relies on the calculation of
A) prices of a variable basket of goods that changes frequently. B) prices of a fixed basket of goods that does not change often. C) the components of GDP that change annually. D) the components of GDP that do not change frequently.
In the foreign exchange market, what factor leads to a movement along the demand curve for dollars?
What will be an ideal response?
Papayas and grapefruit are substitute goods. A drought in California destroyed a good portion of the grapefruit crop. Ceteris paribus,
A. the price of grapefruit will fall, and the price of papayas will increase. B. the price of both papayas and grapefruit will increase. C. the price of both papayas and grapefruit will fall. D. the price of grapefruit will increase, and the price of papayas will fall.
The marginal revenue curve for a perfectly competitive firm will be downward sloping.
Answer the following statement true (T) or false (F)