1. Which of the following have substantially equivalent effects on a nation’s volume of exports and imports?
Exchange rate appreciation and domestic deflation
Exchange rate depreciation and domestic inflation
Exchange rate appreciation and a decrease in the domestic supply of money
Exchange rate depreciation and domestic deflation
2. Which of the following statements best describes the 12 Federal Reserve Banks?
They are privately owned and publicly controlled central banks whose basic goal is to earn profits for their owners.
They are privately owned and privately controlled central banks whose basic goal is to provide an ample and orderly market for U.S. Treasury securities.
They are privately owned and publicly controlled central banks whose basic function is to minimize the risks in commercial banking in order to make it a reasonably profitable industry.
They are privately owned and publicly controlled central banks whose basic goal is to control the money supply and interest rates in promoting the general economic welfare
3. Buyers will opt out of markets in which:
there are only foreign sellers
there is inadequate information about sellers and their products
there are significant negative externalities
standardized products are being produced
4. Pure monopolists may obtain economic profits in the long run because:
of advertising
marginal revenue is constant as sales increase
of rising average fixed costs
of barriers to entry