Economists spend much of their time
A) describing how choices are made and analyzing the results of those choices.
B) arguing that optimal decisions are rarely made at the margin.
C) using normative analysis to develop economic models.
D) telling businesses what goods and services to produce and how to produce them.
Answer: A
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Suppose that country A pegs its currency to the currency of country B. Which of the following will NOT be a benefit of this arrangement to country A?
A) lower transactions costs for A to conduct international trade with country B B) increased capital flows between the two countries because of increased certainty of future exchange rates C) decreased migration between the two countries because of increased certainty of future exchange rates D) lower costs of economic transactions costs between the two countries, leading to welfare gains for country A
In the figure above, what is the equilibrium price and quantity?
What will be an ideal response?