Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements. What panel describes what happens in this market when the price of bratwurst falls?

In country A, the government takes no action to influence the exchange rates of its currency with other currencies. The rate is determined by market forces. Country A is said to have a:

A) flexible exchange rate system. B) fixed exchange rate system. C) dirty-float exchange rate system. D) nominal exchange rate system.

What best defines active policy making?

A) taking action to offset a change in economic performance B) taking action to increase long-term economic growth C) taking action to make markets more competitive so as to improve efficiency D) taking action to make markets less competitive so as to improve equity