Refer to the figure below. 
If Row Resorts offers reduced rates, then Column Cruises would receive the highest payoff if it:
A. offered reduced its rates.
B. entered into a cartel with Row Resorts and agreed to jointly reduce rates.
C. chose either strategy because it will have the same payoff in either case.
D. kept its rates high.
Answer: A
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The Bretton Woods agreements in 1944
a. established the International Monetary Fund. b. sanctioned world trade on the gold-exchange system. c. allowed nations to devalue their currencies under certain conditions. d. All of the above are correct.
A producer is hiring 20 units of labor and 6 units of capital (bundle A). The price of labor is $10, the price of capital is $2, and at A, the marginal products of labor and capital are both equal to 20. Beginning at A, if the producer increases labor by one unit and decreases capital by 1 unit, then
A. output remains constant and cost increases by $8. B. cost remains constant and output increases by 20 units. C. cost remains constant and output decreases by 20 units. D. output remains constant and cost decreases by $8. E. both cost and output remain constant.
Investment decisions are based on the trade-off between the:
A. potential profit that could be generated and the willingness of a lender to make the loan. B. future value of the loan and the present value of the loan. C. interest rate that savers will earn and the interest rate that the borrowers will have to pay. D. potential profit that could be generated by investment and the cost of borrowing money to finance the investment.
Assume a simplified banking system subject to a 20 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000, the money supply:
A. increases $100,000. B. increases $500,000. C. increases $600,000. D. decreases $500,000.