Is the "international adjustment mechanism" for fixed and flexible exchange rates the same? Discuss briefly
What will be an ideal response?
No, R^ - E^ = P^F + Y^ - D^. If P^F increases, then with fixed rates R^ increases. With a float, E^ falls. With a managed float, (R^ - E^) increases with both R^ increasing and E^ falling.
Economics
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Which of the following is an example of spending on goods and services in the circular flow model?
A) Belinda purchases a new computer for her tax-preparation business. B) Timmy purchases a new examination table for use in his veterinary clinic. C) Celeste buys fresh herbs at the farmers' market to use in her restaurant. D) Javier buys 800 square feet of wood flooring for his vacation home.
Economics
The short-run price elasticity of demand for refrigerators is relatively inelastic
Indicate whether the statement is true or false
Economics