An increase in the supply of dollars on the foreign exchange market, all else equal, will result in: A) appreciation of the U.S. dollar and depreciation of the foreign currency. B) appreciation of the U.S. dollar and appreciation of the foreign currency. C) depreciation of the U.S. dollar and depreciation of the foreign currency. D) […]
A decrease in the supply of dollars on the foreign exchange market, all else equal, will result in: A) appreciation of the U.S. dollar and depreciation of the foreign currency. B) appreciation of the U.S. dollar and appreciation of the foreign currency. C) depreciation of the U.S. dollar and depreciation of the foreign currency. D) […]
Higher marginal propensities to consume and invest will make the slope of the aggregate expenditure function steeper. Indicate whether the statement is true or false ANSWER TRUE
Assume the inverse demand function for a good can be written as: P = 30 – 2Q. Assuming P = $10, the resulting consumer surplus would be equal to: A) $50. B) $100. C) $200. D) $225. ANSWER B
Data collected on the same observation unit at a number of points in time are called: A) cross-section data. B) time series data. C) panel data. D) none of the above. ANSWER B
Banks A) provide a channel for linking those who want to save with those who want to invest. B) produce nothing of value and are therefore a drain on society’s resources. C) are the only financial institutions allowed to give loans. D) hold very little of the average American’s wealth. ANSWER A
What is a stock? How do stocks affect the economy? What will be an ideal response? ANSWER A stock represents a share of ownership of a corporation, or a claim on a firm’s earnings/assets. Stocks are part of wealth, and changes in their value affect people’s willingness to spend. Changes in stock prices affect […]
Which of the following is considered a necessary condition for successful price discrimination? A) A firm’s customers must all have the same price elasticity of demand. B) Firms are able to prevent resale among different groups of customers. C) Firms must be able to determine each customer’s maximum willingness to pay for the product in […]
Government expenditure does not include transfer payments. Indicate whether the statement is true or false ANSWER TRUE
Assume a new technology is developed that increases the productivity of capital and creates additional economies of scale. How would this affect the firm’s minimum efficient scale of operation. Illustrate this effect graphically. What will be an ideal response? ANSWER The increase in the productivity of capital would result in a decrease in the […]
