What are the results of a contractionary monetary policy in an open economy with floating exchange rates and internationally mobile capital?
a. The dollar appreciates, which leads to an increase in exports and a decrease in imports. The country therefore winds up with a deficit in capital and a surplus in its balance of trade.
b. The dollar appreciates, which attracts foreign capital. Also, imports rise and exports decline. The country therefore winds up with a surplus in capital and an increase in its trade deficit.
c. The dollar depreciates, which attracts foreign capital. Also, exports rise and imports decline. The country therefore winds up with a deficit in capital and a surplus in its balance of trade.
d. The dollar depreciates, which leads to a larger real GDP and a larger trade surplus.
b
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In a competitive market, the demand and supply curves are Q = 12 - P and Q = 5P, respectively. If output is fixed at Q = 5, what is the amount of the resulting deadweight loss?
A) 0 B) 5 C) 10 D) It cannot be determined without more information.
A firm produces 100 . units per week. It hires 10 full-time workers (40 hours/week) at an hourly wage of $20 . Raw materials are ordered weekly and they costs $5 for every unit produced. The weekly cost of the rent payment for the factory is $1,500 . How do the overall costs breakdown for the week?
a. total variable cost is $5,000 . total fixed cost is $1,500 . total cost is $6,500 b. total variable cost is $5,000 . total fixed cost is $9,500 . total cost is $14,500 c. total variable cost is $13,000 . total fixed cost is $1,500 . total cost is $14,500 d. total variable cost is $13,000 . total fixed cost is $9,500 . total cost is $22,500