Assume that Switzerland and Britain have floating exchange rates. Other things unchanged, if a tight money policy raises interest rates in Britain as compared to Switzerland:
A. gold bullion will flow into Switzerland.
B. the Swiss franc will depreciate.
C. the pound will depreciate.
D. the Swiss franc will appreciate.
B. the Swiss franc will depreciate.
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Suppose that the government imposes a price ceiling on gasoline that is below the equilibrium price. The black market for gasoline is ________ market in which the price ________ ceiling price
A) a legal; exceeds the B) an illegal; exceeds the C) a legal; is less than the D) an illegal; is less than the E) an illegal; equals
__________ trading volume promotes __________ bid-asked spreads
A) Large; wide B) Large; narrow C) Small; narrow D) None of the above.
John wants to buy a new lawn mower. He can either buy it in the US and pay $500 or buy it in Mexico and pay 8188 Mexican Pesos. At the exchange rate of 1 Mexican Peso=0.771US$, ignoring any other costs, he would
a. Prefer buying in the US b. Prefer buying in Mexico c. Be indifferent about where he buys his television d. None of the above
With the Coase theorem, the private solution yields:
A. a more efficient outcome than a government solution would. B. a less efficient outcome than a government solution would. C. the same amount of efficiency a government solution would. D. None of these statements is true.