To maintain a pegged rate, a nation faces a trilemma and must also:
A) generate extra export revenues.
B) watch carefully to ensure imports and exports are equal.
C) adjust its interest rates and money supply to ensure the home interest rate is equal to the foreign interest rate to prevent pressure on the exchange rate.
D) restrict foreign capital inflows and domestic capital outflows.
Answer: C) adjust its interest rates and money supply to ensure the home interest rate is equal to the foreign interest rate to prevent pressure on the exchange rate.
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According to the monetarist view, the aggregate supply curve is:
A. Upward sloping to the right. B. Perfectly vertical at the natural rate of unemployment. C. Flat or horizontal until full employment is reached. D. Flat or horizontal at all levels of output.
A firm's marginal revenue is
A) the change in total revenue that results from a one-unit increase in the quantity sold. B) total revenue minus total cost. C) the change in total revenue minus the change in total cost. D) the change in total revenue that results from an increase in the demand for the good or service. E) less than the market price for a perfectly competitive firm.