The difference between nominal and real exchange rates is: A) absolute prices. B) foreign prices. C) domestic prices. D) ratio of domestic prices to foreign prices. ANSWER D
Date: September 10th, 2020
An index of the weighted exchange value of the U.S. dollar versus the currencies of a broad group of major U.S. trading partners is called: A) trade-weighted dollar. B) exchange-weighted dollar. C) dollarization. D) bilateral dollar. ANSWER A
Date: September 10th, 2020
Stabilization of business cycle fluctuations focuses on the long run. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Consideration of the minimum efficient scale of operation would suggest that, to minimize production costs, the market should be served by a large number of small firms when the LRAC curve slopes downward over the relevant range of output. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Assume wages paid by a firm to its workers decrease. What will be the reaction of consumers as the market moves to its new equilibrium? A) Quantity demanded will decrease. B) Quantity demanded will increase. C) The demand curve will shift to the left. D) There will be no reaction by consumers, since input prices […]
Date: September 10th, 2020
The interest rate on Baa corporate bonds is ________, on average, than interest rates on Treasuries, and the spread between these rates became ________ in the 1970s. A) lower; smaller B) lower; larger C) higher; smaller D) higher; larger ANSWER D
Date: September 10th, 2020
Provide a simple definition of the price elasticity of demand and explain why knowing the price elasticity for her product is useful to the firm’s manager. What will be an ideal response? ANSWER The price elasticity of demand is a measure of the sensitivity of quantity demanded to a change in price. To be […]
Date: September 10th, 2020
According to the kinked demand curve model, if there is a modest increase in a firm’s variable production costs, what is likely to happen to the firm’s profit-maximizing level of output and the amount of profit earned by the firm? Why? What will be an ideal response? ANSWER Given the way the kinked demand […]
Date: September 10th, 2020
Increase in capacity utilization will ________ the expenditure curve: A) decrease. B) increase. C) not change. D) none of the above. ANSWER A
Date: September 10th, 2020
Assume the Congress approves increased drilling for oil in the U.S. to address the current energy shortage. People who are in favor of this policy argue that, ceteris paribus, this would cause: A) an increase in the equilibrium price and quantity of oil. B) a decrease in the equilibrium price and quantity of oil. C) […]
Date: September 10th, 2020
