Currency stabilization policy is:
A. successful only if the government can identify the long-run equilibrium value of the exchange rate.
B. successful only if the government does not attempt to affect market expectations.
C. never successful.
D. always successful.
Answer: A
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Determining the most socially desirable level of income equality or inequality
a. is done through markets, rather than by the government b. is done directly by firms c. involves normative economics d. involves evaluation of public goods e. involves evaluation of all externalities, both positive and negative
If the value of the marginal product of labor is less than the wage, then the firm could
a. increase profit by hiring additional labor. b. increase profit by reducing the amount of labor hired. c. increase revenue by lowering output. d. reduce total cost by hiring additional workers.