What is seigniorage? What are the factors that determine whether a currency should emerge as the dominant reserve currency?
What will be an ideal response?
The difference between the exchange value and the cost of producing a money. Stability of value, size of domestic economy relative to international transactions.
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The long-run Phillips curve is a vertical line because
A) there is no relationship between the natural unemployment rate and the inflation rate. B) real GDP does not depend on the unemployment rate. C) in the long run, the natural unemployment rate increases when inflation increases. D) the unemployment rate decreases when the inflation rate increases. E) the natural unemployment rate only depends on the inflation rate.
Which of the following is a critical element of the Heckscher-Ohlin model?
A) That different goods display different factor intensities in their production. B) That some countries have no comparative advantage in anything. C) That trade may not be beneficial. D) All of the above.