Suppose economic stability in the United States increases. This will tend to cause which of the following to occur?
A) The demand for U.S. dollars will rise in the foreign exchange market.
B) The supply of U.S. dollars will rise in the foreign exchange market.
C) The demand for euros will rise in the foreign exchange market.
D) Nothing will change in the foreign exchange market.
A
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Refer to the figure above. Which of the following explains the impact on the domestic buyers and sellers when the country opens to free trade?
A) Both the sellers and the buyers are made worse off. B) Both the sellers and the buyers gain. C) The domestic firms lose but the buyers gain. D) The domestic firms gain but the buyers lose.
Under rate-of-return regulation, average cost pricing
A) is inflated so the firm can make economic profits. B) includes variable costs but not a cost for capital. C) includes what they consider to be a fair rate of return on investment. D) includes a cost for capital that generates an above normal rate of return.