In a noncooperative environment of pegged exchange rates, if the home nation is experiencing high inflation due to excessive demand, it may choose to ______, which would cause______.
A) forgo the pegged exchange rate; extreme depreciation
B) devalue its currency; the foreign nation to suffer deficient demand for its products
C) cut the monetary growth rate; a rise in interest rates
D) revalue its currency; the foreign nation to suffer excessive demand for its products
Ans: D) revalue its currency; the foreign nation to suffer excessive demand for its products
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Smith and Jones comprise a two-person economy. Their hourly rates of production are shown in the accompanying table. Calculators Per HourComputers Per HourSmith10010Jones1206 Suppose Smith and Jones begin by producing 100 calculators per hour; as Smith and Jones choose to efficiently produce fewer computers and more calculators, ________ should devote more time to calculators because his ________.
A. Jones; absolute advantage is smaller B. Smith; opportunity costs are lower C. Smith; absolute advantage is larger D. Jones; opportunity costs are lower
Refer to the information provided in Figure 23.2 below to answer the question(s) that follow.
Figure 23.2Refer to Figure 23.2. Along the segment AB, Jerry's
A. consumption equals his income. B. saving is negative. C. saving is positive. D. consumption is less than his income.