The empirical data indicate that in the short run exchange rates are much more variable than inflation differentials

If the Environmental Protection Agency (EPA) directs an old lace factory to install an expensive water purification system to treat its wastes before they are discharged into the river,

a. the price of lace will fall b. the lace factory may go out of business c. this directive is unenforceable d. the private cost curve will shift to the right e. more lace is sold so the factory can cover the higher costs

If the income effect of a change in the wage dominates the substitution effect, then workers will want to work more when the wage increases.

Answer the following statement true (T) or false (F)