Suppose the U.S. dollar appreciates in value against the Australian dollar, and the Fed intervenes in the foreign exchange market by using U.S. dollars to buy Australian dollars. The Fed could sterilize the expansionary effect of this intervention by:
a. buying U.S. dollars in the foreign exchange market.
b. buying U.S. government bonds in the domestic open market.
c. selling Australian dollars in the foreign exchange market.
d. selling U.S. government bonds in the domestic open market.
e. buying Australian dollars in the foreign exchange market.
d
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Long-run equilibrium in a monopolistically competitive market is similar to long-run equilibrium in a
perfectly competitive market in that in both markets, firms A) produce at the minimum point of their average total cost curves. B) produce where price equals marginal revenue. C) break even. D) produce where price equals marginal cost.
Refer to Figure 15-9. What is the difference between the monopoly's price and perfectly competitive industry's price?
A) The monopoly's price is higher by $3.50. B) The monopoly's price is higher by $13. C) The monopoly's price is higher by $21. D) The monopoly's price is higher by $9.50.