Which of the following is an exogenous variable in the Three-Sector-Model?
a. Real Domestic GDP
b. Open market operations
c. Quantity of real credit per time period
d. Quantity of currency per time period
e. All of the above are exogenous.
.B
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Using exchange rates, it is possible to price-compare in different nations. If an iPod costs $90 in the United States and €45 in France, in which nation would you get the better deal when the dollar-euro exchange rate is $2.50/€?
a. The iPod would be cheaper in France. b. The iPod would be cheaper in the United States. c. The iPod would cost the same in both countries. d. From the information provided, it is impossible to answer this question.
For a firm in a perfectly competitive market, if it is producing at a level of output where marginal costs are equal to marginal revenue it:
A. should cut back production to increase profits. B. should increase production to increase profits. C. is producing a profit-maximizing quantity. D. is impossible to tell how quantity should be changed without more information.