Under a fixed exchange rate system, if an appreciation in the value of a country's currency develops, the monetary authorities ________
A) will gain international reserves
B) buy the domestic currency in foreign exchange markets
C) sell foreign exchange in foreign exchange markets
D) will lose international reserves
A
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Tyrell has $50 per week to spend on good A, which has a price of $5, and good B, which has a price of $4 . He buys six units of A and five of B. The marginal utility of the sixth unit of A is 25, and the marginal utility of the fifth unit of B is 20 . Which of the following is true?
a. He is maximizing his utility. b. We cannot tell if he is maximizing his utility unless we know his total utility. c. He is not maximizing his utility and should buy more of A. d. He is not maximizing his utility and should buy more of B. e. He is not maximizing his utility because he is not spending all of his income.
Suppose France subsidizes French wheat farmers, while Germany offers no subsidy to German wheat farmers. As a result of the French subsidy, sales of French wheat to Germany
a. may prompt German farmers to invoke the unfair-competition argument. b. increase the consumer surplus of German buyers of wheat. c. increase the total surplus of the German people. d. All of the above are correct.