Purchasing power parity is widely accepted as a better explainer of short-run changes in exchange rates than interest rate effects
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following prevented the Fed from reducing long-term real interest rates during the Financial Crisis of 2007-2009?
A) an increase in expected inflation B) an increase in the risk premium C) the collapse in the housing market D) the failure of the federal funds rate to respond to monetary policy
People of Moifo, a small island country, use oranges in exchange for various goods and services. If all the oranges are of uniform quality, which of the following is likely to cause a collapse of the orange currency in Moifo? a. Oranges cannot serve as a medium of exchange. b. Oranges cannot serve as a unit of account
c. Oranges cannot store value. d. Oranges are not grown in the territory of Moifo.
Which of the following helps explain growing income inequality in the United States in recent years?
A. Reduced immigration. B. Increased demand for highly skilled workers. C. The falling labor force participation rate of women. D. Increased power of unions.
Which of the following statements is INCORRECT regarding the properties of information products?
A. In the long run, the producer earns sufficient revenue to cover the opportunity cost of capital. B. The average total cost curve for a firm that sells an information product slopes upward. C. The firm experiences economies of operation in the short run. D. Providing an information product entails incurring relatively high fixed costs.