Suppose a currency's value in the foreign exchange market is determined solely by market supply and demand without any intervention by the government authority, the currency has
A) a fixed exchange rate.
B) a gold standard.
C) a price control in its exchange rate.
D) a floating exchange rate.
Answer: D
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The graph below shows the production possibilities curve for an economy producing two goods, X and Y. Which of the points on the graph indicate unemployed resources?
A. D only
B. E and A only
C. B and A only
D. B and C only
Investment in kind refers to the possibility that:
A. DVCs will invest for the purpose of becoming less dependent on world markets. B. a DVC will overinvest in industries in which it has a comparative advantage, disrupting its development program. C. newly established manufacturing firms may expand by reinvesting their profits. D. surplus labor in, say, agriculture can be diverted to the production of simple capital goods such as earthen dams.