The overriding factor in analyzing long-run changes in the exchange rate is:
a. the exchange rate in the period t- 1.
b. how a permanent change in the supply of money is transmitted to prices and interest rates.
c. the reaction of traders as they conduct arbitrage and speculation.
d. the notion that there is no long run, only a series of short-run measurements.
Ans: b. how a permanent change in the supply of money is transmitted to prices and interest rates.
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According to Ricardo's explanation of land rent, what happens when the demand for land increases?
A) The supply curve shifts to the right just enough to keep the price per acre constant. B) Revenues to owners of land increase but economic rent declines. C) The amount of economic rent stays constant, constrained by a perfectly inelastic supply curve. D) Both revenues to owners of land and economic rent increase.
Since measurable factors such as years of experience and years of education explain less than half of the variation in wages, ability, effort, and chance must play a significant role in determining wages
a. True b. False Indicate whether the statement is true or false