The chief cause of short-run changes in exchange rates is
a. the world's political situation.
b. "hot money" chasing high interest rates.
c. changes in consumer tastes.
d. central bank interventions.
b
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Which of the following is definitely true for a per-unit tax in the goods market where neither demand nor supply is perfectly inelastic:
A. The more price inelastic demand is, the lower deadweight loss will be. B. The more price inelastic supply is, the higher deadweight loss will be. C. A demand become more price inelastic, the after tax price for consumers rises. D. Both (a) and (b) E. Both (b) and (c) F. Both (a) and (c) G. All of the above H. None of the above
Gordon suggests that full indexation of production costs to nominal AD would solve the macroeconomic externality. However, individual firms would be unlikely to extend full indexation to their workers because
A) its local customers may not buy its products at the new price level. B) its suppliers may reside in foreign countries and are therefore, not subject to indexation. C) other competitor firms will not index their wages. D) All of the above.
If the world supply of diamonds decreases, diamonds become more valuable, and therefore, the consumer surplus derived from diamonds increases
a. True b. False Indicate whether the statement is true or false
Which of the following is an assumption made about a competitive labor market?
a. A firm must offer a higher wage rate to attract more labor. b. A firm must offer a lower wage rate to attract more labor. c. A firm cannot influence the market wage rate. d. The labor supply curve facing each firm is inelastic. e. Workers compete for jobs and firms pay a variety of wage rates.