The slope of an isoquant is equal to the ratio of the price of the input on the horizontal axis divided by the price of the input on the vertical axis, multiplied by -1
Indicate whether the statement is true or false
FALSE
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It is difficult to determine expected real rates of interest because
A) we never know exactly what inflation rates people anticipate. B) we cannot measure the nominal interest rate. C) the inflation rate is a subjective measurement. D) we cannot measure the inflation rate.
It is argued that global trade tends to be more important to countries with smaller economies than the U.S. Is this empirically verified?
What will be an ideal response?
Advocates of flexible exchange rates claim that under flexible exchange rates
A) enhanced control over fiscal policy would allow countries to dismantle their distorting barriers to international payments. B) reduced control over monetary policy would allow countries to dismantle their distorting barriers to international payments. C) enhanced control over monetary policy would allow countries to increase their distorting barriers to international payments. D) enhanced control over monetary policy would allow countries to dismantle their distorting barriers to international payments. E) enhanced control over monetary policy would destabilize exchange rates.
In perfect competition, a firm’s marginal revenue equals the price of the product.
Answer the following statement true (T) or false (F)