A depreciation of one's currency means that:
a. the country's exports will become more expensive.
b. the country's imports will become more expensive.
c. the country's imports will become less expensive.
d. it now requires less of this currency in exchange for one unit of another currency.
e. it now requires more units of other currencies in exchange for one unit of this currency.
b
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The ________ the marginal tax rate, the ________ the expenditure multiplier
A) larger; more negative B) smaller; smaller C) larger; larger D) smaller; larger E) None of the above is correct, because the expenditure multiplier is not related to the marginal tax rate.
Suppose the equilibrium price of milk is $3 per gallon but the federal government sets the market price at $4 per gallon. The market mechanism will force the milk price back down to $3 per gallon unless the government:
A) rations the excess demand for milk among consumers. B) buys the excess supply of milk and removes it from the market. C) Both A and B are plausible actions. D) The government cannot maintain the price above the equilibrium level.