Figure 17-4
In , the equilibrium price of Dominican pesos is Pe. If the Dominican Republic government fixes the price of foreign currency in terms of domestic currency at Pf (below equilibrium), what does the quantity Qd through Qs represent?
a.
the quantity of Dominican exports
b.
a shortage of foreign exchange
c.
the quantity of Dominican imports
d.
a surplus of foreign exchange
b
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Because they combine high yield and high risk, junk bonds
A) should never be considered sound investments. B) may increase the overall yield of a portfolio containing stocks without an undue increase in risk. C) should be purchased only by risk lovers. D) None of the above.
A local government currently has a tax base of $10 million and a tax rate of 10 percent. If the tax rate is increased to 12 percent, the tax base becomes $8.5 million. If the goal is to maximize tax revenues the tax rate should be
A) raised above 12 percent. B) kept at 10 percent. C) raised to 12 percent. D) abolished.