Advocates of flexible exchange rates claim that under flexible exchange rates, the central bank of
A) an overheated economy could cool down activity by increasing the money supply without worrying that undesired reserve inflow would undermine its stabilization effort.
B) a cooled economy could cool down activity by contracting the money supply without worrying that undesired reserve inflow would undermine its stabilization effort.
C) an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve inflow would undermine its stabilization effort.
D) an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve outflow would undermine its stabilization effort.
E) an overheated economy could cool down activity by decreasing employment and increasing output without worrying that this would undermine its stabilization effort.
C
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If a tax is imposed per unit of a good sold, ________
A) the supply curve for the good shifts to the right B) the supply curve for the good shifts to the left C) the demand curve for the good shifts to the right D) the demand curve for the good shifts to the left
Nick is delighted to see that the price of his favorite food, black olives, has fallen. Which of the following could be responsible?
a. an increase in the demand for black olives b. a decrease in the supply of black olives c. a simultaneous increase in demand and decrease in supply of black olives d. a simultaneous decrease in demand and increase in supply of black olives