Which of the following are advantages of greater exchange rate flexibility?
a. The alleviation of potential conflicts that arise between the internal balance and the external balance.
b. The insulation of the domestic economy from economic shocks.
c. An expansion abroad would have contractionary effects on the domestic economy.
d. Both a and b
e. Both a and c
A
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Refer to Table 3-2. The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market. If the price of cashews falls from $4 to $2, the market quantity demanded would
A) increase by 28 lbs. B) decrease by 36 lbs. C) decrease by 28 lbs. D) increase by 36 lbs.
Figure 10-2
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Figure 10-2 shows demand and short-run cost curves for a perfectly competitive firm. At its profit-maximizing output, the firm’s total ____ is represented by area ____.
A. loss; GBHC B. profit; ADGHC C. loss; ADEC D. profit; EGH
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:
A. 5 apples for each pair of shoes. B. 5 pairs of shoes for each apple. C. 1/5 apple for each pair of shoes. D. 1 pair of shoes for every 2 apples.
For each pair of goods, explain which is more elastic: toothpicks vs. cars; electricity vs. yachts; IBM computers vs. Apple computers