Author Question: A common argument for fixed exchange rates is that they A) give central banks greater freedom in ... (Read 84 times)

Evvie72

  • Hero Member
  • *****
  • Posts: 519
A common argument for fixed exchange rates is that they
 
  A) give central banks greater freedom in adjusting their economy's level of output.
  B) forever free the central bank from have to adjust the exchange rate to fundamental changes in the economy.
  C) make trade more costly, and thus encourage domestic citizens to buy domestically produced output.
  D) all of the above
  E) none of the above

Question 2

Suppose the capital stock increases by 10 and the number of employed workers increases by 5. Given this information, explain what will happen to output and to output per worker.
 
  What will be an ideal response?



xiaomengxian

  • Sr. Member
  • ****
  • Posts: 311
Answer to Question 1

E

Answer to Question 2

The level of output will obviously increase because the amount of inputs has increased. Given that the capital stock increases by an amount greater than the amount of workers, we know that the capital labor ratio has increased. This implies that output per worker has also increased.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Asthma attacks and symptoms usually get started by specific triggers (such as viruses, allergies, gases, and air particles). You should talk to your doctor about these triggers and find ways to avoid or get rid of them.

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

When taking monoamine oxidase inhibitors, people should avoid a variety of foods, which include alcoholic beverages, bean curd, broad (fava) bean pods, cheese, fish, ginseng, protein extracts, meat, sauerkraut, shrimp paste, soups, and yeast.

Did you know?

Cytomegalovirus affects nearly the same amount of newborns every year as Down syndrome.

For a complete list of videos, visit our video library