Contractionary monetary policy in a flexible exchange rate regime will cause
A) a shift of the IP curve.
B) a depreciation of the domestic currency.
C) an increase in E.
D) no change in E.
C
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Suppose people value clean air more as their incomes increase, then
A) the marginal cost curve of pollution abatement to shift left, increasing the degree of air quality. B) the marginal cost curve of pollution abatement to shift right, increasing the degree of air quality. C) the marginal benefit curve of pollution abatement to shift right, increasing the degree of air quality. D) the marginal benefit curve of pollution abatement to shift left, increasing the degree of air quality.
The parity ratio initially stood at 0.50. Then after several years, the prices received by farmers doubled while the prices they paid tripled. This will bring the parity ratio to:
A. 0.25 B. 0.33 C. 0.75 D. 0.80