If your professor decided to give all of his students the highest ...

[Shelles]

If your professor decided to give all of his students the highest grade in the class, would that affect your classmates' incentives to study?
 
  What will be an ideal response?

Question 2

Refer to Figure 19-12. The graph above depicts supply and demand for U.S. dollars during a trading day, where the quantity is millions of dollars. In order to support a fixed exchange rate of 0.30 pounds per dollar, the U.S. central bank must
 
  A) sell 0.4 million dollars per trading day. B) buy 0.8 million dollars per trading day.
  C) sell 0.8 million dollars per trading day. D) buy 0.4 million dollars per trading day.

[meganmoser117]

Answer to Question 1

If every student were given the same grade irrespective of how he or she did on an exam, students' incentive to study. Even without studying, a student would be guaranteed' a higher grade than he would have received otherwise. Eventually, one can expect students in the class to stop studying altogether.

Answer to Question 2

C