Which is the best characterization of the current international payments system?
A) The World Bank and the IMF approve nations' exchange rate regimes and ensure that financial flows are not hampered by imbalances.
B) All nations are now operating with floating exchange rates and free capital flows.
C) The four richest industrial nations have floating exchange rates, while the rest of the nations peg to those currencies.
D) There is no standard and no rules, and each nation chooses the regime that works best for its individual situation at the time.
Ans: D) There is no standard and no rules, and each nation chooses the regime that works best for its individual situation at the time.
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In an economy with no income taxes or imports, the expenditure multiplier is
A) greater than 1 only if the MPC is greater than 1. B) less than 1 only if the MPC is less than 1. C) equal to 1 if the MPC is greater than 1. D) greater than 1 if the MPC is less than 1. E) always less than 1 no matter what the size of the MPC.
Which of the following is NOT one of the factors that influences the supply of a product?
A) technology B) income C) number of suppliers D) expected future prices
Due to free entry and exit in monopolistic competition, in the long run price must be equal to
In calculating the nation’s total output, net exports do not
A. represent exports of goods and services minus imports of goods and services. B. have been a negative number in the last several years. C. would include purchases of U.S.-made automobiles by foreigners minus purchase of foreign-made automobiles by U.S. residents. D. have been positive since global trade as expanded.