Econ 1.13 Test

Which of the following is the least likely outcome when a monopolist adopts first-degree price discrimination because of customers’ differing demand elasticities?

• A. The output increases to the point at which price equals the marginal cost.
• B. The monopolist shares the total surplus with consumers.
• C. The price for a marginal unit decreases to less than the price for other units.

None

• A. ZAR 3671 per million SEK traded.
• B. SEK 4200 per million ZAR traded.
• C. ZAR 4200 per million SEK traded.

None

• A. C
• B. B
• C. A

Assume that the nominal spot exchange rate (USD/EUR) increases by 7.5%, the eurozone price level decreases by 4%, and the US price level increases by 2.5%. The change in the real exchange rate (%) is closest to:

• A. 0.7%.
• B. –6.3%.
• C. 14.8%.

None

• A. 100 .
• B. 60 .
• C. 20 .

Both monetary and fiscal policies can most likely be used by a government to:

• A. redistribute income and wealth.
• B. affect the level of interest rates.
• C. influence the level of economic activity.

Q. In order to minimize the foreign exchange exposure on a euro-denominated receivable due from a German company in 100 days, a British company would most likely initiate a:

• A. spot transaction.
• B. forward contract.
• C. real exchange rate contract.

Q. Companies most likely have a well-defined supply function when the market structure is:

• A. oligopoly.
• B. perfect competition.
• C. monopolistic competition.

Q. A price index of goods and services that excludes food and energy is most likely used to calculate:

• A. core inflation.
• B. the GDP deflator.
• C. headline inflation.

Which organization will most likely aid a country that is experiencing an economically detrimental current account deficit?

• A. The World Bank
• B. The World Trade Organization
• C. The International Monetary Fund