Question Details

Which of the following is never negative 



1.	The purchasing power parity hypothesis implies that an increase in inflation in one country relative to another will over a long period of time
a)	increase exports
b)	reduce the competitive pressure on prices
c)	lower the value of the currency in the country with the higher inflation rate
d)	increase foreign aid
e)	increase the speculative demand for the currency
2.	The optimal currency area involves a trade-off of reducing transaction costs but the inability to use changes in exchange rates to help ailing regions. If the US, Canada, and Mexico had one single currency (the Peso-Dollar) we would tend to see all of the following EXCEPT:
a)	Even more intraregional trade of goods across the three countries.
b)	Lower transaction costs of trading within North America.
c)	A greater difficulty in helping Mexico as you can no longer deflate the Mexican peso.
d)	Less migration of workers across the three countries
e)	An elimination of correlated macroeconomic shocks across the countries
3.	Using demand and supply curves for the Japanese yen based on the $/Â¥ price for yen, an increase in US INFLATION RATES would
a)	Decrease the demand for yen and decrease the supply of the yen. 
b)	Increase the demand for yen and decrease the supply of the yen.
c)	Increase the demand and increase the supply of yen.
d)	Decrease both the supply and the demand of yen.
e)	Have no impact on the demand or supply of the yen
4.	Which of the following is never negative ?
a)	marginal product
b)	average product
c)	production elasticity
d)	marginal rate of technical substitution
e)	slope of the isocost lines
5.	Marginal revenue product is:
a)	defined as the amount that an additional unit of the variable input adds to the total revenue
b)	equal to the marginal factor cost of the variable factor times the marginal revenue resulting from the increase in output obtained
c)	equal to the marginal product of the variable factor times the marginal product resulting from the increase in output obtained
d)	equal to the unknown variable



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