How would you characterize the foreign exchange market?
a. Extremely competitive.
b. Somewhat competitive.
c. Monopolistic.
d. Driven by demand by tourists and individuals.
e. Involving usually physical exchange one currency for another.
.A
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As an economist working for a U.S. government agency you determine that a particular country has a sacrifice ratio of 3 . Policy-makers in that country are thinking of lowering the inflation rate from 10% to 4%. Is this sacrifice ratio higher or lower than the typical estimate? From your numbers, what is the amount of output that will be lost for this country to reduce its inflation rate?
a. The sacrifice ratio is higher than the typical estimate. It will cost 30% of annual output to reach the new inflation target. b. The sacrifice ratio is higher than the typical estimate. It will cost 18% of annual output to reach the new inflation target. c. The sacrifice ratio is lower than the typical estimate. It will cost 30% of annual output to reach the new inflation target. d. The sacrifice ratio is lower than the typical estimate. It will cost 18% of annual output to reach the new inflation target.
If the price of a good rises, then the equilibrium consumption of that good:
A. decreases if it is a normal good. B. increases if it is an inferior good. C. remains the same. D. None of the statements is correct.