What is the primary reason exchange rates were overvalued under ISI?
What will be an ideal response?
Because fixed exchange rates were used and inflation was higher than that of trading partners
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Refer to Figure 9.5. If the government establishes a price floor of $2.50 and farmers grow only the amount of berries that will be sold, the resulting deadweight loss will be
A) $1.50. B) 200 pounds of berries. C) $150. D) $250. E) $300.
If the rate of return on the stock market is rm and the rate of return on a risk-free asset is rf, then
A) rm - rf measures the risk, all of it nondiversifiable, one has to accept in the stock market. B) rm - rf measures the risk, all of it diversifiable, one has to accept in the stock market. C) rm + rf measures the risk, all of it nondiversifiable, one has to accept in the stock market. D) rm + rf measures the risk, all of it diversifiable, one has to accept in the stock market. E) rm rf measures the stock market's total risk.