Suppose there are two countries (country A and country B) each with its own currency (Currency A and Currency B). Suppose the exchange rate is expressed in terms of amount of Currency B needed to get Currency A. A weakening of Currency A would show up as
A. a decrease in the exchange rate.
B. an increase in the exchange rate.
C. a decrease in the interest rate.
D. an increase in the interest rate.
Answer: A
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Refer to Figure 11-1. Using the per-worker production function in the figure above, the largest changes in an economy's standard of living would be achieved by a movement from
A) A to B to C. B) C to B to A. C) B to C to D. D) D to C to B.
It has been argued that in the long run monopolistic competition is inefficient because
A) there are too many firms, each with excess capacity, producing too little output. B) there are few many firms, each with excess capacity, producing too much output. C) minimum average total costs are achieved but price exceeds marginal cost. D) minimum average total costs are not achieved and marginal cost exceeds price.