Using a fixed exchange rate to undervalue your currency:
A. will increase your exports.
B. makes imports very expensive for your citizens.
C. will encourage capital flow to countries other than your own.
D. All of these statements are true.
Answer: D
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Farmers can use their land to grow soy beans or corn. If the price of corn rises,
A) the supply of soybeans decreases and the soybean supply curve shifts leftward. B) the supply of soybeans increases. C) the supply of corn increases and the corn supply curve shifts rightward. D) the supply of corn increases.
Sometimes one observes that the price of a company's stock falls after the announcement of favorable earnings. This phenomenon is
A) clearly inconsistent with the efficient markets hypothesis. B) consistent with the efficient markets hypothesis if the earnings were not as high as anticipated. C) consistent with the efficient markets hypothesis if the earnings were not as low as anticipated. D) consistent with the efficient markets hypothesis if the favorable earnings were expected.
A "near money" is an asset that can be
a. indistinguishable from commodity money. b. spent easily. c. a close substitute for money. d. only issued by a bank.
Wages under a bilateral monopoly are generally:
A. equal to those under a union monopoly. B. greater than those under a union monopoly but less than those under monopsony. C. greater than those under monopsony but less than those under a union monopoly. D. equal to those under monopsony.