All of the following are true regarding flexible exchange rates except
A. Exchange rate movements alter relative prices and may disrupt import and export flows.
B. The quantity of foreign exchange demanded equals the quantity supplied.
C. Some people are hurt while others are helped by exchange rate movements.
D. Speculators typically push exchange rates away from the long-term equilibrium.
Answer: D
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Suppose that the total labor force is 100 individuals with 10 unemployed. The unemployment rate is ________. Now assume that 10 people drop out of the labor force and that 10 remain unemployed. The new unemployment rate is ________
A) 9 percent; 10 percent B) 10 percent; 9 percent C) 10 percent; 11 percent D) 11 percent; 10 percent
Under a binding price ceiling, what does the change in consumer surplus represent?
A) The gain in surplus for those buyers who can still purchase the product at the lower price. B) The loss in surplus for those buyers who previously purchased some units of the good at the higher price, but these units are no longer produced at the lower price. C) The loss in surplus for those buyers who would like the purchase the excess demand created by the price ceiling policy. D) Both A and B are correct. E) Both A and C are correct.
Necessities such as food and clothing tend to have
a. high price elasticities of demand and high income elasticities of demand. b. high price elasticities of demand and low income elasticities of demand. c. low price elasticities of demand and high income elasticities of demand. d. low price elasticities of demand and low income elasticities of demand.
When the demand and the supply for bread increases simultaneously, will we able determine their effects on the equilibrium quantity?
What will be an ideal response?