In the presence of purchasing-power parity, if one dollar exchanges for two British pounds and if a VCR costs $400 in the United States, then in Great Britain the VCR should cost
a. 200 pounds
b. 400 pounds
c. 600 pounds
d. 800 pounds
Ans: d. 800 pounds
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Which of the following policies would be expected to increase private saving?
A. Increasing the tax rate on capital gains B. Replacing the income tax with a consumption tax C. Reducing the size of down payments needed to buy a house D. Providing more generous Social Security retirement benefits
A strategy of setting price below the monopoly profit-maximizing price but at the highest level that will still result in a loss for a potential entrant into the market is known as
A) entry pricing. B) contestable pricing. C) limit pricing. D) unlimited pricing.
The shutdown rule for a firm in a perfectly competitive industry is that the firm should cease production if
A) P < MC. B) P < ATC. C) P < AVC. D) P < AFC.
Most of the bank failures in the 1980s and 1990s occurred
a. in states that were rural and in states where the oil industry was important b. in states where there was a large level of new investment in commercial property c. in states with large urban populations such as New York, Michigan, and Pennsylvania d. because of mismanagement, having little to do with the state of the economy e. in states where the population was growing very slowly or actually declining