A strengthening of the U.S. dollar relative to the euro can cause problems for
A. European manufacturers.
B. American banks.
C. American importers.
D. American exporters.
Answer: D
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The market for unskilled labor is illustrated in the figure above. The market is in equilibrium and then a minimum wage of $5 per hour is imposed. Unemployment will equal
A) 0 hours. B) 10 million hours per year. C) 20 million hours per year. D) 30 million hours per year.
A _________ tax is one where those with higher incomes pay a higher share of taxes out of their income than those with lower incomes.
a. flat b. progressive c. proportional d. regressive
Suppose a capital-abundant large country experiences a significant increase in its capital stock. This change in endowments is most likely to lead to
A. an improvement in the country's terms of trade. B. no change in the price of the labor-intensive good relative to the price of the capital-intensive good. C. an increased willingness to trade. D. a decreased willingness to trade.
Under a system of fixed exchange rates, what happens if a country's currency is overvalued?
A. The central bank gains official reserve assets. B. The central bank loses official reserve assets. C. The exchange rate rises. D. The currency appreciates.