We expect that in the long run, exchange rate movements will largely reflect inflation differentials
Indicate whether the statement is true or false
TRUE
Explanation: Because real events causing relative price movements are often random and short run in nature.
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Assuming that transactions costs are sufficiently low, the Coase theorem results in the economic pie being maximized. What impact do legal constraints have on this prediction of the Coase theorem?
What will be an ideal response?
If the economy is in a recession, in an effort to move the economy to the long-run equilibrium, the government could:
A. decrease spending to increase aggregate demand. B. decrease spending to decrease aggregate demand. C. increase spending to increase aggregate demand. D. increase spending to decrease aggregate demand.
During World War II, prisoners of war used ________ as money
A) bullets B) cowrie shells C) chocolate D) cigarettes
Consider the following game. You pick a card from a deck and each time you select an ace, you get $260. For all other cards you must pay $13. What is the expected value of the game?
A. -$12 B. $0 C. $8 D. $32