A floating exchange rate is where the rate is
a. determined by the domestic market for money.
b. set by the government as a hard peg
c. set by the government as a soft peg.
d. determined in the foreign exchange market.
d. determined in the foreign exchange market.
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In the Solow model, if saving per worker initially exceeds investment per worker,
A) the economy will experience inflation. B) the capital—labor ratio will increase. C) investment per worker will decline. D) saving per worker will decline.
Refer to the above figure. We are currently producing at point c. Which of the following statements is TRUE?
A) Resources are not being efficiently utilized. B) Resources are being efficiently utilized. C) The only way to produce more of Goods X or Y is to have an increase in the amount of resources. D) The Law of Increasing Additional Cost does not hold.