According to Mundell, countries to constitute an optimal currency area need to satisfy one of the two conditions. Explain these conditions
What will be an ideal response?
Mundell argued these countries need to satisfy one of the two conditions: 1 ) the countries have to experience similar shocks, then they would have chosen roughly the same monetary policy; 2 ) Or, if the countries experience different shocks, they must have high factor mobility.
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If the absolute price elasticity of demand of a good is 1.46, then the total revenues will increase if its market price
A) increases. B) decreases. C) stays the same. D) changes, but we can't tell without more information if the price increases or decreases.
A price ceiling on maize will likely
a. increase the amount of maize demanded b. reduce the amount of wheat supplied c. cause maize to be smuggled outside the country d. reduce the income of maize farmers e. all of the above