Which of the following terms is used to describe an exchange rate regime in which the rate is fixed to a currency or basket of currencies?
A. Exchange controls
B. Managed float
C. Pegged exchange rate
D. Fully convertible
Answer: C
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The International Maritime Bureau said the waters off Somalia are the world's most dangerous, accounting for nearly a third reported pirate attacks worldwide. Suppose all boats are insured to $100,000 and pay a premium of $10,000 each
Suppose 10 out of 100 boats are attacked by pirates and these 10 file claims with their insurance. If the insurance company's only costs are the claims it must pay, has the insurance company earned an economic profit? A) Yes, they earned an economic profit of $90,000. B) No, they broke even. C) No, they sustained an economic loss of $90,000. D) Yes, they earned an economic profit of $1,000,000.
Factors causing an increase in currency holdings include
A) an increase in the interest rates paid on checkable deposits. B) an increase in the cost of acquiring currency. C) a decrease in bank panics. D) an increase in illegal activity.
At a firm's profit-maximizing level of output, its price is $200 and its short-run average total cost is $225 . The firm
a. has a profit of $25 per unit of output. b. should shut down if its short-run average fixed cost is less than $25. c. has a loss of $100 per unit of output. d. should shut down if its short-run average variable cost exceeds $25.
Figure 10-17
Suppose an economy is currently operating at output Y1 associated with AD1 and SRAS1, shown in . Initially, the output of this economy is
a.
above its potential, and the rate of unemployment is greater than the natural rate.
b.
below its potential, and the rate of unemployment is greater than the natural rate.
c.
above its potential, and the rate of unemployment is less than the natural rate.
d.
below its potential, and the rate of unemployment is less than the natural rate.