Suppose that labor is mobile between countries A and B. If the relative demand for goods rises in country A, then labor can flow from ______________. It may be possible in this situation for countries A and B to __________________ which would help to___________________
A) country A to country B; fix the exchange rate between the two countries (or have a common currency); eliminate the risks associated with having a flexible exchange rate.
B) country B to country A; impose trade restrictions upon one another; increase employment in country A
C) country B to country A; fix the exchange rate between the two countries (or have a common currency); eliminate the risks associated with having a flexible exchange rate
D) country A to country B; adopt flexible exchange rates; reduce the risk of exchange rate fluctuations
C
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If we look at real and nominal interest rates in the United States since 1971, we see that
A) the real interest rate has almost always been less than the nominal interest rate because of inflation. B) at times the nominal interest rate has been greater than the real interest rate and at times has been less than it. C) the difference between the nominal and real interest rates has widened during the 1990s because of inflation. D) the nominal interest rate has always been less than the real interest rate because of inflation. E) both the nominal and real interest rates were negative in the highly inflationary 1970s.
A public good:
A. is a good that is nonrival. B. is a good that is excludable. C. is any good provided by the government. D. All of these are true about public goods.
People basically borrow in order to
A) go into debt. B) have more funds. C) have interest payments. D) have current consumption rather than waiting to consume in the future.
Along a straight-line demand curve (dropping all minus signs), the price elasticity of demand
a. gets larger as quantity demanded gets larger. b. gets smaller as quantity demanded gets larger. c. always equals one. d. is constant (though not necessarily equal to one).