Under a flexible-price monetary approach to the exchange rate
A) when the domestic money supply falls, the price level would eventually fall, increasing the interest rate.
B) when the domestic money supply falls, the price level would fall right away, causing a reduction in the interest rate.
C) when the domestic money supply falls, the price level would fall right away, causing an increase in the interest rate.
D) when the domestic money supply falls, the price level would eventually fall, keeping the interest rate constant.
E) when the domestic money supply falls, the price level would fall right away, keeping the interest rate constant.
E
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When financial institutions are able to reduce the costs of information for each service they offer by applying the same information source to each service, we say that the financial institution is realizing
A) economies of scope. B) economies of scale. C) increasing returns. D) diminishing marginal returns.
In order to use schooling as a signal,
A. firms must be able to easily verify each worker's amount of schooling. B. some people must choose to not complete schooling. C. the signal must be costlier for low-skilled workers than for high-skilled workers. D. the cost of purchasing the signal must not be so costly that high-skilled workers do not value obtaining it. E. All of these are required for schooling to serve as a signal.