Please state why it’s wrong or uncertain if applicable True or False or uncertaintyfor-oeticallynge in the price of imported goods relative to localgoods.12. Eurobanking have grown rapidly because of lack of regulation and con-sequent opportunity for Eurobanks to pay slightly higher deposit ratesand make international loans at slightly lower loan rates.13. If the balance on current account is positive (a surplus), adjustment ofthe balance to zero would usually require the real exchange rate to rise.14. With flexible exchange rates, central banks do not have to finance cur-rent account deficits because balance of payments equilibrium is re-stored by changes in exchange rates.15. Canada should move to a common currency with the United States onceit has much the same inflation rate as the United States.16. The variability of real exchange rates has been much greater when acountry adopts of fixed exchange rates (as under the Bretton-Woodssystem) than when it floats its nominal exchange rate.

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12. Eurobanking have grown rapidly because of lack of regulation and con- sequent opportunity for Eurobanks to pay slightly higher deposit rates and make international loans at slightly lower loan rates.

12. Eurobanking have grown rapidly because of lack of regulation and con- sequent opportunity for Eurobanks to pay slightly higher deposit rates and make international loans at slightly lower loan rates.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Please state why it’s wrong or uncertain if applicable

True or False or uncertainty
for-
oetically
nge in the price of imported goods relative to local
goods.
12. Eurobanking have grown rapidly because of lack of regulation and con-
sequent opportunity for Eurobanks to pay slightly higher deposit rates
and make international loans at slightly lower loan rates.
13. If the balance on current account is positive (a surplus), adjustment of
the balance to zero would usually require the real exchange rate to rise.
14. With flexible exchange rates, central banks do not have to finance cur-
rent account deficits because balance of payments equilibrium is re-
stored by changes in exchange rates.
15. Canada should move to a common currency with the United States once
it has much the same inflation rate as the United States.
16. The variability of real exchange rates has been much greater when a
country adopts of fixed exchange rates (as under the Bretton-Woods
system) than when it floats its nominal exchange rate.

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K L Q MPL APL (Q/L) VML (MPL*P) FC VC (L*150) TC 5 0 0 0 0 5 1 50 50 50 50 25 150 175 5 2 125 75 62.5 150 25 300 325 5 3 225 100 75 200 25 450 475 5 4 375 150 93.7 300 25 600 625 5 5 450 75 90 150 25 750 775 5 6 450 0 75 0 25 900 925 5 7 400 -50 57.14 -100 25 1050 1075 5 8 425 -75 53.12 -150 25 1200 1225 5 9 450 -25 50 -50 25 1350 1375 5 10 500 -50 50 -100 25 1500 1525 5 11 525 25 47.7 50 25 1650 1675 Define firm’s fixed costs. Next, what is Firm’s FC in the Table above. Why?
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