The fact that exchange rates are nearly identical in different markets around the world is due to
a. the actions of speculators
b. official action by central banks around the world
c. the actions of arbitrageurs
d. agreement by policy makers of the major industrial countries
e. the actions of currency converters
QUESTION 2A do-it-yourself approach to production is more likely when
a. technology is complex
b. inputs are difficult to identify
c. resources cannot easily be measured
d. the price of inputs is known
e. contracts are complex
QUESTION 3Speculators profit by taking risks, while the actions of arbitrageurs involve no risk.
a. True
b. False
QUESTION 4Which of the following statements about resource allocation is correct?
a. Within a firm, resources are allocated by prices; in the market, resources are allocated by the decisions of managers.
b. Resources are allocated by prices both in the market and within the firm.
c. Within a firm, resources are allocated by the decisions of managers; in the market, resources are allocated by prices.
d. Resources are allocated by the decisions of managers both within the firm and in the market.
e. In the market, resources are allocated either by prices or by the decisions of managers.
QUESTION 5Exchange rates
a. are always fixed
b. fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied
c. fluctuate to equate imports and exports
d. fluctuate to equate interest rates in various countries
e. fluctuate according to agreements between the governments of various countries
QUESTION 6The firm becomes the dominant organization type whenever
a. markets exist
b. markets don't exist
c. the net value of centralized, organized production exceeds the net value of market-arranged production
d. the net value of market-arranged production exceeds the net value of centralized, organized production
e. private enterprise eliminates shirking
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