In a fixed exchange rate system
A. market forces play a role in determining the fixed value of a currency.
B. a central bank affects the value of a currency by changing its foreign exchange reserves.
C. the International Monetary Fund determines exchange rates.
D. market forces and the country's stock of gold determine its exchange rate.
Answer: B
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Suppose the equilibrium price in the market is $10 and the price elasticity of demand for the linear demand function at the market equilibrium is ?1.25. Then we know that:
A. marginal revenue is $2. B. demand is unit elastic. C. marginal revenue is $50. D. demand is inelastic.
Costs of production are determined
A. by the technologies that are available and by input prices. B. by the technologies that are available and by the demand for the output. C. only by the input prices that are available. D. only by the technologies that are available.