Refer to Figure 19-4. The equilibrium exchange rate is originally at A, $3/pound. Suppose the British government pegs its currency at $4/pound
Speculators expect that the value of the pound will drop and this shifts the demand curve for pounds to D2. If the government abandons the peg, the equilibrium exchange rate would be
A) $4/pound. B) $3/pound.
C) $2/pound. D) less than $2/pound.
C
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The above table contains information about the nation of Syldavia. There are no income taxes or imports in this nation. The expenditure multiplier is equal to
A) 1.25. B) 10. C) 0.8. D) 2. E) 5.
In a perfectly competitive market, which of the following will increase the economic profit the firms make in the short run?
A) a decrease in market demand B) an increase in market demand C) an increase in labor costs D) an increase in the number of firms
In a firm, an entrepreneur is one who
A. works for the owner by running the firm. B. represents the firm in legal proceedings. C. decides to hire or fire. D. takes the risks associated with a business firm.
Suppose that a dramatic technological breakthrough related to nuclear fusion occurs so that the cost of energy is significantly reduced. We would expect that the immediate effect of this technological advance is
a. a shift to the right in most demand curves b. a decrease in the demand for automobiles c. a shift to the right in most supply curves d. to cause long-run supply curves to become steeper e. to increase the price of fossil fuels