ECON 312 Entire Course Principles of Economics DeVry

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ECON 312 Assignment Week 1 DeVry
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(TCO 1) Economics is the study of (Points : 1)
Increasing the level of productive resources so there is maximum output in society.
Increasing the level of productive resources so there is a minimum level of income.
How people, institutions, and society make choices under conditions of scarcity.
The efficient use of scarce resources paid for at the minimum level of cost to consumers and
businesses
(TCO 1) The key economic concept that serves as the basis for the study of economics
is (Points : 1)
Inflation
Unemployment.
Money
scarcity
(TCO 1) From an economic perspective, when a student decides to attend another year of
college, the student has concluded that the marginal (Points : 1)
Costs of attending college has decreased that year.
Benefits of attending college has increased that year.
Benefits of attending college are greater than the marginal costs.
Costs of attending college will be subsidized by someone else such as parents or the government.
(TCO 1) Which is considered to be an economic resource by economists? (Points : 1)
Rent
Money
Labor
Wages
(TCO 1) If an economy is producing at a point inside a production possibilities curve,
then (Points : 1)
The economy is efficient
There is economic growth.
Resources are unemployed.
Resources are fully employed.
(TCO 1) Which statement best describes a command economy? (Points : 1)
The production of goods and services is determined primarily by markets, but the allocation of
goods and services is determined primarily by government.
The production of goods and services is determined primarily by government, but the allocation
of goods and services is determined primarily by markets.
The production and allocation of goods and services is determined primarily through markets.
The production and allocation of goods and services is determined primarily through
government.
(TCO 1) The development of CDs and DVDs that significantly reduced the market for
cassette tapes would be an example of (Points : 1)
Specialization.
Derived demand.

Roundabout production.
Creative destruction.
(TCO 1) In the circular flow model, households (Points : 1)
Buy products and resources.
Sell products and resources.
Buy products and sell resources.
Sell products and buy resources.
(TCO 1) In a market system, well-defined property rights are important because
they (Points : 1)
Reduce unnecessary investment.
Limit destructive economic growth.
Create economic problems.
Encourage economic activity.
(TCO 1) Consider a barter situation where you have pens and you want pencils. To achieve
your objective, there must be a(n) (Points : 1)
Use of capital goods.
Entry and exit from the market.
Large number of sellers.
Coincidence of wants.
(TCO 1) After graduating from high school, Ron Willis plans to go to college. The college
tuition is $15,000 a year. But, instead of going to college, Ron could take a full-time job
paying $20,000. If Ron decides to go to college, what is his opportunity cost for attending
for one year? Show your calculations. (Points : 5)
(TCO 1) Identify some intrinsic qualities of capitalist and command economic systems.
Identify two countries that practice each. (Points : 5)
ECON 312 Assignment Week 2 DeVry
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(TCO 2) A demand curve (Points : 1)
Shows the relationship between price and quantity supplied
Indicates the quantity demanded at each price in a series of prices.
Graphs as an upsloping line.
Shows the relationship between income and spending.
(TCO 2) Which of the following will not cause the demand for product K to
change? (Points : 1)
A change in the price of close-substitute product J
An increase in consumer incomes
A change in the price of K
A change in consumer tastes
(TCO 2) College students living off campus frequently consume large amounts of ramen
noodles and boxed macaroni and cheese. When they finish school and start their careers,
their consumption of both goods frequently declines. This suggests that ramen noodles and
boxed macaroni and cheese are (Points : 1)
Inferior goods
Normal goods
Complementary goods
Substitute goods

(TCO 2) Suppose that tacos and pizza are substitutes and that soda and pizza are
complements. We would expect an increase in the price of pizza to (Points : 1)
Reduce the demand for tacos and increase the demand for sodas
Reduce the demand for soda and increase the demand for tacos
Increase the demand for both soda and tacos
Reduce the demand for both soda and tacos
(TCO 2) A firm's supply curve is upsloping because (Points : 1)
The expansion of production necessitates the use of qualitatively inferior inputs.
Mass production economies are associated with larger levels of output
Consumers envision a positive relationship between price and quality.
Beyond some point the production costs of additional units of output will rise
(TCO 2) If the demand for bacon is relatively elastic, a 10% decline in the price of bacon
will (Points : 1)
Decrease the amount demanded by more than 10%.
Increase the amount demanded by more than 10%.
Decrease the amount demanded by less than 10%.
Increase the amount demanded by less than 10%.
(TCO 2) The price of product X is reduced from $100 to $90 and, as a result, the quantity
demanded increases from 50 to 60 units. Therefore, demand for X in this price
range (Points : 1)
has declined
is of unit elasticity
is inelastic
is elastic
(TCO 2) The concept of price elasticity of demand measures (Points : 1)
The slope of the demand curve.
The number of buyers in a market
The extent to which the demand curve shifts as the result of a price decline
The sensitivity of consumer purchases to price changes
(TCO 2) If the University Chamber Music Society decides to raise ticket prices to provide
more funds to finance concerts, the Society is assuming that the demand for tickets
is (Points : 1)
Parallel to the horizontal axis
Shifting to the left
Inelastic
Elastic
(TCO 2) The demand for autos is likely to be (Points : 1)
Less price elastic than the demand for Honda Accords
More price elastic than the demand for Honda Accords
Of the same price elasticity as the demand for Honda Accords
Perfectly inelastic
(TCO 2) What is the Law of Demand? Why does the demand curve slope
downwards? (Points : 5)
The Law of Demand is the same thing as…
(TCO 2) Suppose the price of widgets rises from $7 to $9 and consumption of widgets falls
from 25 widgets a month to 15 widgets. Calculate your price elasticity of demand of

widgets. What can you say about your price elasticity of demand of widgets? Is it Elastic,
Inelastic, or Unitary Elastic? Why? Use the Midpoint formula and please show your
work. (Points : 5)
Relatively Elastic because 2.0 > 1….
ECON 312 Assignment Week 3 DeVry
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(TCO 3) Which of the following is most likely to be an implicit cost for Company
X? (Points : 1)
Forgone rent from the building owned and used by Company X
Rental payments on IBM equipment
Payments for raw materials purchased from Company Y
Transportation costs paid to a nearby trucking firm
(TCO 3) To economists, the main difference between the short run and the long run is
that (Points : 1)
The law of diminishing returns applies in the long run, but not in the short run.
In the long run all resources are variable, while in the short run at least one resource is fixed
Fixed costs are more important to decision making in the long run than they are in the short run
In the short run all resources are fixed, while in the long run all resources are variable.
(TCO 3) Economists would describe the U.S. automobile industry as (Points : 1)
Purely competitive
An oligopoly
Monopolistically competitive
A pure monopoly
(TCO 3) If a firm in a purely competitive industry is confronted with an equilibrium price
of $5, its marginal revenue (Points : 1)
May be either greater or less than $5.
Will also be $5
Will be less than $5
Will be greater than $5
(TCO 3) Which of the following is a characteristic of pure monopoly? (Points : 1)
Close substitute products
Barriers to entry
The absence of market power
"Price taking"
(TCO 3) Confronted with the same unit cost data, a monopolistic producer will
charge (Points : 1)
The same price and produce the same output as a competitive firm
A higher price and produce a larger output than a competitive firm
A higher price and produce a smaller output than a competitive firm
A lower price and produce a smaller output than a competitive firm
(TCO 3) Under monopolistic competition entry to the industry is (Points : 1)
Completely free of barriers
More difficult than under pure competition but not nearly as difficult as under pure monopoly
More difficult than under pure monopoly
Blocked

(TCO 3) The term oligopoly indicates (Points : 1)
A one-firm industry
Many producers of a differentiated product
A few firms producing either a differentiated or a homogeneous product
An industry whose four-firm concentration ratio is low
(TCO 3) Which of the following is a unique feature of oligopoly? (Points : 1)
Mutual interdependence
Advertising expenditures
Product differentiation
Nonprice competition
(TCO 3) Concentration ratios measure the (Points : 1)
Geographic location of the largest corporations in each industry
Degree to which product price exceeds marginal cost in various industries
Percentage of total industry sales accounted for by the largest firms in the industry
Number of firms in an industry
(TCO 3) What is the LAW OF DIMINISHING RETURNS, and why is this law considered
a short-run phenomenon? (Points : 5)
The law of diminishing returns assumes that technology is…
(TCO 3) Identify the primary characteristics of monopolistic competition and
oligopoly. Give examples of each. (Points : 5)
A monopolistic competition represents the opposite…
ECON 312 Antitrust Practices and Market Power Homework Week 3 DeVry
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Research authoritative articles using the news and the DeVry Online Library
(http://library.devry.edu) for a recent case of antitrust investigation. You are free to choose a
case from any industry and any part of the world. Based on the case you have selected,
answer the following questions.
1. Why was/were the firm(s) investigated for antitrust behavior?
2. Identify some of the costs (pecuniary and nonpecuniary) associated with the antitrust
behavior (firms having power in the market). Additionally, note the specific antitrust
act (Sherman Act, Clayton Act, etc.) under which the violation was investigated.
3. Given your research and findings, are monopolies and oligopolies (firms
demonstrating power) always bad for society? Be sure to provide real world examples
of where this may be the case to strengthen your position.
4. Provide at least one example of a case where having a monopoly or oligopoly may
actually benefit the society.
Preview:
1. Antitrust Cases: Standard Oil and Google
Up until 1909-1911, Standard Oil was considered as the biggest, most dominant and most
profitable oil business in the United States of America owned through a…
2. Why were the firms found in violation / being investigated for antitrust behavior?
Given the above sample cases, one might ask, so what is wrong with being the biggest, most
dominant, or richest company in any…

3. Identify some of the costs (pecuniary and nonpecuniary) associated with the antitrust
behavior (firms having power in the market). Additionally, note the specific antitrust
act (Sherman Act, Clayton Act, etc.) under which the violation was investigated.
Among the primary activities prohibited under antitrust laws are monopolies, price fixing, and
predatory practices (i.e., pecuniary). It also covers…
4. Given your research and findings, are monopolies and oligopolies (firms demonstrating
power) always bad for society? Be sure to provide real world examples of where this
may be the case to strengthen your position.
Monopoly is a market structure dominated by one firm whereas oligopoly--with few firms. Due
to a firm’s market dominance, it is…
5. Provide at least one example of a case where having a monopoly or oligopoly may
actually benefit the society.
In some cases, there are certain industries that require intensive capital investment that only few
firms are able to…
ECON 312 Midterm Exam DeVry
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(TCO 1) As a consequence of the condition of scarcity (Points : 3)
There is never enough of anything
Production has to be centrally planned
Things which are plentiful have relatively high prices
Individuals and communities have to make choices from among alternatives
(TCO 1) The opportunity cost of constructing a new public highway is the (Points : 3)
Money cost of hiring contractors and construction workers for the new highway
Value of other goods and services that must be sacrificed to construct the new highway
Expected cost of constructing the new highway in a future year
Value of shorter driving times and distances when the new highway is completed
(TCO 1) A nation can increase its production possibilities by (Points : 3)
Shifting resources from investment good production to consumer good production
Shifting resources from private goods to public goods
Improving labor productivity
Eliminating discrimination
(TCO 1) Which expression is another way of saying "marginal benefit"? (Points : 3)
Benefits given up
Unintended gain
Employment benefits
Extra benefit
(TCO 1) Which would not be considered as a capital resource of a business by an
economist? (Points : 3)
A van used by a mother to transport the family around
An office computer used by an accountant
A crane used by a building contractor
A razor used by a barber
(TCO 1) The Soviet Union economy of the 1980s would best be classified as (Points : 3)
A market system
Pure capitalism

Laissez-faire capitalism
A command system
(TCO 1) Markets in which firms sell their output of goods and services are called (Points :
3)
Resource markets
Product markets
Command markets
Mixed markets
(TCO 1) By free enterprise, we mean that (Points : 3)
Products are provided free to those who can't afford to buy them
Individuals may obtain resources, organize production, and sell the resulting output in any legal
way they choose
Individual producers are free to produce whatever the government decides is needed by the
society.
Individuals are free to buy whatever products will satisfy their needs the most
(TCO 1) Which is one of the five fundamental questions that need to be dealt with in any
economic system? (Points : 3)
What makes the rate of unemployment low?
Who will be the richest group in the economy?
What goods and services will be produced?
How high should the prices of goods and services be?
(TCO 1) A major problem with state ownership of resources is that it does not (Points : 3)
Allow for the full use of central economic planning
Let state enterprises buy resources used to make products
Let state enterprises sell products produced with those resources
Give incentives for individuals to make the best use of those resources
(TCO 2) An increase in product price will cause: (Points : 3)
Quantity demanded to decrease
Quantity supplied to decrease
Quantity demanded to increase
The supply curve to shift to the left
(TCO 2) At the point where the demand and supply curves intersect (Points : 3)
The buying and selling decisions of consumers and producers are inconsistent with one another.
The market is in disequilibrium.
There is neither a surplus nor a shortage of the product
Quantity demanded exceeds quantity supplied
Question 13.13. (TCO 2) If an effective price ceiling is placed on hamburgers then (Points :
3)
The quantity demanded will exceed the quantity supplied
A black market for hamburger may evolve
Consumers may want government to ration hamburger
All of these are likely outcomes
(TCO 2) An increase in demand for oil along with a simultaneous increase in supply of oil
will (Points : 3)
Decrease price and increase quantity
Increase price and decrease quantity

Increase quantity, but whether it increases price depends on how much each curve shifts
Increase price, but whether it increases quantity depends on how much each curve shifts
(TCO 2) Two months ago, the Marbury Shirt company sold 200 shirts at $30 per shirt.
Last month, the company raised its price to $35 per shirt and sold 300 shirts. Evidently the
company experienced a(n) (Points : 3)
Decrease in demand
Increase in demand
Decrease in supply
Increase in supply
(TCO 2) When the price of a product is increased 10 percent, the quantity demanded
decreases 15 percent. In this range of prices, demand for this product is (Points : 3)
Elastic
Inelastic
cross-elastic
unitary elastic
(TCO 2) Demand is said to be inelastic when (Points : 3)
An increase in price results in a reduction in total revenue
A reduction in price results in an increase in total revenue
A reduction in price results in a decrease in total revenue
The elasticity coefficient exceeds one
(TCO 2) The price elasticity of demand increases with the length of the period considered
because (Points : 3)
Consumers' incomes will increase over time
The demand curve will shift outward as time passes
All prices will increase over time
Consumers will be better able to find substitutes
(TCO 2) If the demand for a product is elastic, then (Points : 3)
A higher tax on the product will generate more tax revenue
A higher tax on the product will generate less tax revenue
Total revenue will decrease as price decreases
Total revenue will remain constant as price increases
(TCO 2) When universities announce a large tuition increase and follow it with an
announcement that more financial aid will be available, they are assuming that students
who pay full tuition (Points : 3)
Have elastic demand and students who use financial aid have inelastic demand
Have inelastic demand and students who use financial aid have elastic demand
View a college education as an inferior good and students who use financial aid view it as a
normal good
View a college education as a normal good and students who use financial aid view it as an
inferior good
(TCO 3) Suppose that you could prepare your own tax return in 15 hours, or you could
hire a tax specialist to prepare it for you in two hours. You value your time at $11 an hour.
The tax specialist will charge you $55 an hour. The opportunity cost of preparing your own
tax return is (Points : 3)
$40
$55

$110
$165
(TCO 3) If a firm's revenues just cover all its opportunity costs, then (Points : 3)
Normal profit is zero
Economic profit is zero
Total revenues equal its explicit costs
Total revenues equal its implicit costs
(TCO 3) In the short run (Points : 3)
A firm cannot vary its output level
All factors of production can be varied
A firm can change its fixed inputs
Output is raised or reduced by changing the levels of variable inputs
(TCO 3) Fixed costs are those costs which are (Points : 3)
Zero if the firm produces no output in the short run
Unchanging through time
Independent of the rate of output
Implicit to a competitive firm
(TCO 3) The phrase "don't cry over spilt milk" could be rephrased in economic terms by
saying (Points : 3)
"Sunk costs are irrelevant to a decision."
"Real resources have opportunity costs."
"There are economies and diseconomies of scale."
"The law of diminishing returns applies to everything."
(TCO 3) If you know that total fixed cost is $200, total variable cost is $600, and total
product is four units, then average total cost must be: (Points : 3)
$200
$250
$800
$3200
Page 2
(TCO 3) In which market model would there be a unique product for which there are no
close substitutes? (Points : 3)
Monopolistic competition
Pure competition
Pure monopoly
Oligopoly
(TCO 3) In which two market models would advertising be used most often? (Points : 3)
Pure competition and monopolistic competition
Pure competition and pure monopoly
Monopolistic competition and oligopoly
Pure monopoly and oligopoly
(TCO 3) The steel and automobile industries would be examples of which market
model? (Points : 3)
Monopolistic competition
Pure competition
Pure monopoly

Oligopoly
(TCO 3) In pure competition, the demand for the product of a single firm is
perfectly (Points : 3)
Elastic because the firm produces a unique product
Inelastic because the firm produces a unique product
Elastic because many other firms produce the same product
Inelastic because many other firms produce the same product
(TCO 3) Let us suppose Harry's, a local supplier of chili and pizza, has the following
revenue-and-cost structure:
Total Revenue
$3,000 Per Week
Total Variable Cost
$2,000 Per Week
Total Fixed Costs
$2,000 Per Week
(Points : 3)
Harry's should stay open in the long run
Harry's should shut down in the short run
Harry's should stay open in the short run
Harry's should shut down in the short run but reopen in the long run
(TCO 3) If a purely competitive firm is producing at an output where marginal revenue
exceeds marginal cost, the firm will increase its profit by (Points : 3)
Reducing production to the point where variable costs are minimized
Reducing production to the point where unit costs are minimized
Reducing its output and simultaneously increasing its price
Increasing its output
(TCO 3) The short-run supply curve for a competitive firm is the (Points : 3)
Entire MC curve
Segment of the MC curve lying below the AVC curve
Segment of the MC curve lying above the AVC curve
Segment of the AVC curve lying to the right of the MC curve
(TCO 3) Which phrase would be most characteristic of pure monopoly? (Points : 3)
Close substitutes
Efficient advertiser
Price taker
Single seller
(TCO 3) Barriers to entry (Points : 3)
usually result in pure competition
can result from government regulation
exist in economic theory but not in the real world
are typically the result of wrongdoing on the part of a firm
(TCO 3) The nondiscriminating pure monopolist must decrease price on all units of a
product sold in order to sell more units. This explains why (Points : 3)
there are barriers to entry in pure monopoly
a monopoly has a perfectly elastic demand curve
marginal revenue is less than average revenue
total revenues are greater than total costs at the profit-maximizing level of output
(TCO 3) Which case below best represents a case of price discrimination? (Points : 3)
An insurance company offers discounts to safe drivers

A major airline sells tickets to senior citizens at lower prices than to other passengers
A professional baseball team pays two players with identical batting averages different salaries
A utility company charges less for electricity used during "off-peak" hours, when it does not
have to operate its less-efficient generating plants
(TCO 3) Which of the following is a characteristic of monopolistic competition? (Points : 3)
Standardized product
Relatively small number of firms
Absence of nonprice competition
Relatively easy entry
(TCO 3) Which set of characteristics below best describes the basic features of
monopolistic competition? (Points : 3)
Easy entry, many firms, and standardized products
Barriers to entry, few firms, and differentiated products
Easy entry, many firms, and differentiated products
Easy entry, few firms, and standardized products
(TCO 3) A unique feature of an oligopolistic industry is (Points : 3)
low barriers to entry
standardized products
diminishing marginal returns
mutual interdependence
(TCO 3) A high concentration ratio indicates that (Points : 3)
the industry is highly profitable
the industry is highly competitive
many firms produce most of the output in an industry
few firms produce most of the output in an industry
(TCO 3) A major reason that firms form a cartel is to (Points : 3)
reduce the elasticity of demand for the product
enlarge the market share for each producer
minimize the costs of production
maximize joint profits
(TCO 1) Which of the following is a land resource? (Points : 3)
A farmer
An oil-drilling rig
A machine for detecting earthquakes
Natural gas
(TCO 1) Refer to the diagram below which is based on the Circular Flow Model in
Chapter 2. Arrows (1) and (2) represent
Graph Description
(Points : 3)
Goods and resources, respectively
Money incomes and output, respectively
Output and money incomes, respectively
Resources and goods, respectively
(TCO 2) Refer to the diagram. A decrease in demand is depicted by a
Graph Description
(Points : 3)

move from Point x to Point y
shift from D1 to D2
shift from D2 to D1
move from Point y to Point x
(TCO 2) Refer to the information and assume the stadium capacity is 5,000. If the
Mudhens' management charges $7 per ticket
Price per Ticket
Quantity Demanded
$13
1,000
11
2,000
9
3,000
7
4,000
5
5,000
3
6,000
(Points : 3)
Some fans who want to see the game will find that tickets are not available
There will be 2,000 empty seats
There will be 1,000 empty seats
The game will be sold out
(TCO 2) Which of the following goods (with their respective income-elasticity coefficients in
parentheses) will most likely suffer a decline in demand during a recession?(Points : 3)
Dinner at a nice restaurant (+1.8)
Chicken purchased at the grocery store for preparation at home (+0.25)
Facial tissue (+0.6)
Plasma-screen and LCD TVs (+4.2)
(TCO 3) In the figure, Curves 1, 2, 3, and 4 represent the
Graph Description
(Points : 3)
ATC, MC, AFC, and AVC curves, respectively
MC, AFC, AVC, and ATC curves, respectively
MC, ATC, AVC, and AFC curves, respectively
ATC, AVC, AFC, and MC curves, respectively
(TCO 1) Refer to the diagram. Points A, B, C, D, and E show
Graph Description
(Points : 3)
That the opportunity cost of bicycles increases, while that of computers is constant
Combinations of bicycles and computers that society can produce by using its resources
efficiently
That the opportunity cost of computers increases, while that of bicycles is constant
That society's demand for computers is greater than its demand for bicycles
(TCO 3) Any activity designed to transfer income or wealth to a particular individual or
firm at society's expense is called (Points : 3)
Patent protection
X-inefficiency
Price discrimination
Rent-seeking

(TCO 3) a.) What is the relationship between economies of scale and a natural monopoly?
b.) Why is the level of output at which marginal revenue equals marginal cost the profitmaximizing output? (Points : 25)
In those extreme cases where there are extensive economies of scale across the full range of
potential output for market demand, it may be…
(TCO 2) Evaluate how the following situations will affect the demand curve for iPods.
(a) Income statistics show that income of 18–25-year-olds have increased by 10 percent
over the last year.
(b) Efforts of music artists wanting greater protection of their music result in more
stringent enforcement of copyrights and the shutdown of numerous illegal
downloading sites.
(c) Believing that it has significant control of the market for portable digital music
players, Apple decides to raise the price of iPods with the goal of increasing profits.
(d) The price of milk decreases.
(Points : 25)
(a) Since 18-to-25-year-olds are the main users of portable digital music players, this will
increase the demand for iPods….
ECON 312 Assignment Week 5 DeVry
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(TCO 6) Discretionary fiscal policy refers to (Points : 1)
Any change in government spending or taxes that destabilizes the economy
The authority that the President has to change personal income tax rates.
Intentional changes in taxes and government expenditures made by Congress to stabilize the
economy
The changes in taxes and transfers that occur as GDP changes.
(TCO 6) An economist who favors smaller government would recommend (Points : 1)
Tax cuts during recession and reductions in government spending during inflation.
Tax increases during recession and tax cuts during inflation.
Tax cuts during recession and tax increases during inflation.
Increases in government spending during recession and tax increases during inflation.
(TCO 6) The financing of a government deficit increases interest rates and, as a result,
reduces investment spending. This statement describes (Points : 1)
The supply-side effects of fiscal policy.
Built-in stability.
The crowding-out effect.
The net export effect
(TCO 5) Which of the following would not shift the aggregate supply curve? (Points : 1)
An increase in labor productivity
A decline in the price of imported oil
A decline in business taxes
An increase in the price level
(TCO 6) Menu costs (Points : 1)
Increase during recession
Decrease during recession.
Are the costs to firms of changing prices and communicating them to customers

Are sunk costs and therefore should be disregarded
(TCO 6) The consumption schedule directly relates (Points : 1)
Consumption to the level of disposable income
Saving to the level of disposable income.
Disposable income to domestic income.
Consumption to saving.
(TCO 6) The size of the MPC is assumed to be (Points : 1)
Less than zero
Greater than one.
Greater than zero, but less than one.
Two or more.
(TCO 5) Refer to the graph. Which of the following factors will shift AD1 to AD2?
Graph Description
(Points : 1)
A decrease in the general price level
An increase in real interest rates
An increase in national incomes abroad
A decrease in the value of financial assets
(TCO 6) The practical significance of the multiplier is that it (Points : 1)
Equates the real interest rate and the expected rate of return on investment.
Magnifies initial changes in spending into larger changes in GDP.
Keeps inflation within tolerable limits.
Helps to stabilize the economy.
(TCO 5) The Federal budget deficit is found by (Points : 1)
Subtracting government tax revenues plus government borrowing from government spending in
a particular year.
Subtracting government tax revenues from government spending in a particular year.
Cumulating the differences between government spending and tax revenues over all years since
the nation's founding.
Subtracting government revenues from the noninvestment-type government spending in a
particular year.
(TCO 5) What effect would each of the following have on aggregate demand or
aggregate supply? Explain.
a. A decrease in real interest rates paid by the consumer
b. An increase in Labor Productivity as a result of a better-educated population
(Points : 5)
(TCO 6) Why do some economists believe that tax cuts are critical to help revive an
economy experiencing a recession? (Points : 5)
ECON 312 Homework Assignment Week 6 DeVry
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Question: What is the "current macroeconomic situation" in the U.S. (e.g. is the U.S. economy
currently concerned about unemployment, inflation, recession, etc.)? What fiscal policies and
monetary policies would be appropriate at this time?
Preview:

Based on the recent report1 of Bureau of Economic Analysis (BEA), US’ GDP declined slightly
in the first quarter of 2015 by 0.7 percent, compared to its fourth quarter growth in 2014 of 2.2
percent. The decline is attributed to: (a) goods exports, specifically capital…
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(TCO 7) If you place a part of your summer earnings in a savings account, you are using
money primarily as a (Points : 1)
Medium of exchange
Store of value
Unit of account
Standard of value
(TCO 7) Currency held in the vault of First National Bank is (Points : 1)
Counted as part of M1
Counted as part of M2, but not M1
Only counted as part of M1 if it was deposited into a checking account
Not counted as part of the money supply
(TCO 7) Answer the question on the basis of the following list of assets:
 1. Large-denominated ($100,000 and more) time deposits
 2. Noncheckable savings deposits
 3. Currency (coins and paper money) in circulation
 4. Small-denominated (less than $100,000) time deposits
 5. Stock certificates
 6. Checkable deposits
 7. Money market deposit accounts
 8. Money market mutual fund balances held by individuals
 9. Money market mutual fund balances held by businesses
 10. Currency held in bank vaults
Refer to the above list. The M1 definition of money comprises item(s)
(Points : 1)
6 only
3, 4, and 6
3 and 6.
3, 6, and 10
(TCO 7) Assume Company X deposits $100,000 in cash in Commercial Bank A. If no
excess reserves exist at the time this deposit is made and the reserve ratio is 20 percent,
Bank A, by itself, can initially increase the money supply by a maximum of (Points : 1)
$50,000
$180,000
$80,000
$500,000
(TCO 7) A bank temporarily short of required reserves may be able to remedy this
situation by (Points : 1)
Borrowing funds in the federal funds market
1

Granting new loans
Shifting some of its vault cash to its reserve account at the Federal Reserve
Buying bonds from the public
(TCO 7) Money is destroyed when (Points : 1)
Loans are made
Checks written on one bank are deposited in another bank
Loans are repaid
The net worth of the banking system declines
(TCO 7) The transactions demand for money is most closely related to money functioning
as a (Points : 1)
Unit of account
Medium of exchange.
Store of value
Measure of value
(TCO 7) If the quantity of money demanded exceeds the quantity supplied (Points : 1)
The supply-of-money curve will shift to the left
The demand-for-money curve will shift to the right
The interest rate will rise
The interest rate will fall.
(TCO 7) Which of the following is not a tool of monetary policy? (Points : 1)
Open market operations
Changes in banking laws
Changes in the amount of reserves available at the term auction facility
Changes in the reserve ratio
(TCO 7) A restrictive monetary policy is designed to shift the: (Points : 1)
Aggregate demand curve rightward
Aggregate demand curve leftward
Aggregate supply curve rightward
Aggregate supply curve leftward
(TCO 7) Explain what is meant by fractional reserve banking. Relate this to money
creation and risk to the bank. (Points : 5)
(TCO 7) Identify the four major instruments of monetary policy. (Points : 5)
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(TCO 8) The United States' most important trading partner quantitatively is (Points : 1)
China
Canada
Mexico
Japan
(TCO 8) The World Trade Organization (Points : 1)
Is also known as the International Monetary Fund (IMF).
Is also known as NAFTA.
Was established to resolve disputes arising under world trade rules.
Enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports
on credit.

(TCO 9) Which of the following is not included in the current account of a nation's balance
of payments? (Points : 1)
Its goods exports
Its goods imports
Its net investment income
Its purchases of real assets abroad
(TCO 9) If the dollar price of the yen rises, then (Points : 1)
The yen price of dollars also rises
The dollar depreciates relative to the yen
The yen depreciates relative to the dollar
The dollar will buy fewer U.S. goods
(TCO 9) In recent years, the United States has had large (Points : 1)
Current account surpluses
Capital and financial account deficits
Balance-of-trade deficits
Balance-of-payments surpluses
(TCO 9) When the U.S. dollar decreases in value relative to foreign currencies the: (Points :
1)
Demand for U.S. exports will decrease
Supply of U.S. exports will decrease
Demand for U.S. exports will increase
Supply of U.S. exports will remain constant
(TCO 8) Other things equal, economists would prefer (Points : 1)
Free trade to tariffs and tariffs to import quotas
Free trade to import quotas and import quotas to tariffs
Import quotas to tariffs and tariffs to voluntary export restrictions
Import quotas to free trade and free trade to tariffs
(TCO 8) Refer to the graphs below. Stanville has a comparative advantage in producing
Graph Description
(Points : 1)
Product A
Product B.
Both Product A and B
Neither Product A nor B
(TCO 9) Which one of the following is not one of the so-called G8 Nations? (Points : 1)
Japan
Canada
United States
China
(TCO 8) In recent years the United States has (Points : 1)
Exported more services abroad than it has imported
Had a small goods trade surplus with Japan
Had a large goods trade surplus with the rest of the world
Maintained an overall trade surplus (goods and services combined) with the rest of the world

(TCO 8 and 10) Evaluate this argument for a trade barrier: “The U.S. needs protection
from cheap foreign labor.” Include some reasons why this might be an invalid
statement. (Points : 5)
The argument is flawed on several grounds. First, U.S. consumers benefit from being able to…
(TCO 9) What are the economic effects of a depreciation of the US dollar on US trade
balances? (Points : 5)
Depreciation means that it takes more dollars to buy foreign currencies. This means that…
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(TCO 1) Opportunity cost is best defined as (Points : 4)
marginal cost minus marginal benefit
the time spent on an economic activity
the value of the best forgone alternative
the money cost of an economic decision
(TCO1) Which is not a factor of production? (Points : 4)
Money
Land
Labor
Capital
(TCO1) A point inside the production possibilities curve is (Points : 4)
Attainable and the economy is efficient
Attainable, but the economy is inefficient
Unattainable, but the economy is inefficient
Unattainable and the economy is efficient
(TCO1) A basic characteristic of a command system is that (Points : 4)
Wages paid to labor are higher
Government owns most economic resources
Free markets are never permitted in a command economy
Government planners play a limited role in deciding what goods will be produced
(TCO 2) Which is consistent with the law of demand? (Points : 4)
A decrease in the price of tacos causes no change in the quantity of tacos demanded
An increase in the price of pizza causes an increase in the quantity of pizza demanded
An increase in the price of hamburgers causes a decrease in the quantity of hamburgers
demanded
A decrease in the price of turkey sandwiches causes a decrease in the quantity of turkey
sandwiches demanded
(TCO 2) What combination of changes would most likely decrease the equilibrium
price? (Points : 4)
When supply decreases and demand increases
When demand increases and supply increases
When demand decreases and supply decreases
When supply increases and demand decreases
(TCO 2) Chuck Grim has a price elasticity of demand for beer of 1.2. Suppose that the
price of beer is increased by 10 percent. What will happen to the total amount Chuck
spends on beer? (Points : 4)
It will not change

It will decrease
It will increase
It is impossible to tell
(TCO 2) Which of the following factors will make the demand for a product relatively
elastic? (Points : 4)
There are few substitutes
The time interval considered is long
The good is considered a necessity
Purchases of the good require a small portion of consumers' budgets
(TCO 2) A purely competitive firm's output is such that its marginal cost is $4 and
marginal revenue is $5. Hint: remember that MR = P for Pure Competition and the Profit
Maximizing rule. Assuming profit maximization, the firm should (Points : 4)
Cut its price and raise its output
Raise its price and cut output
Leave price unchanged and raise output
Leave price unchanged and cut output
(TCO 2) Which case below best represents a case of price discrimination? (Points : 4)
An insurance company offers discounts to safe drivers
A major airline sells tickets to senior citizens at lower prices than to other passengers
A professional baseball team pays two players with identical batting averages different salaries.
A utility company charges less for electricity used during "off-peak" hours, when it does not have
to operate its less-efficient generating plants.
(TCO 3) In the kinked demand model of oligopoly, if one firm increases its price, the most
likely reaction of the other firms will be to (Points : 4)
Decrease their prices
Increase their prices
Not change their prices
Reduce their quantity
(TCO 3) The main difference between the short run and the long run is that (Points : 4)
Firms earn zero profits in the long run
The long run always refers to a time period of one year or longer
In the short run, some inputs are fixed
In the long run, all inputs are fixed
(TCO 4) A recession is a decline in (Points : 4)
The inflation rate that lasts six months or longer
The unemployment rate that lasts six months or longer
Real GDP that lasts six months or longer
Potential GDP that lasts six months or longer
(TCO 4) In calculating the unemployment rate, part-time workers are (Points : 4)
Counted as unemployed because they are not working full-time
Counted as employed because they are receiving payment for work
Used to determine the size of the labor force, but not the unemployment rate
Treated the same as "discouraged" workers who are not actively seeking employment
(TCO 4) Adding the market value of all intermediate goods and services to those of final
goods and services in an economy in a given year would result in (Points : 4)
The calculation of GDP for that year

The calculation of NDP for that year
An amount less than GDP for that year
An amount greater than GDP for that year
(TCO 4) Nominal GDP differs from real GDP because (Points : 4)
Nominal GDP is based on constant prices
Real GDP is based on current prices
Real GDP is adjusted for changes in the price level
Nominal GDP is adjusted for changes in the price level
(TCO 6) When the federal government uses taxation and spending actions to stimulate the
economy it is conducting (Points : 4)
Fiscal policy
Incomes policy
Monetary policy
Employment policy
(TCO 6) Refer to the graph. What combination would most likely cause a shift from AD1
to AD2?
Graph Description
(Points : 4)
Increases in taxes and government spending
Decrease in taxes and increase in government spending
Increase in taxes and no change in government spending
Decreases in taxes and government spending
(TCO 6) The American Recovery and Reinvestment Act of 2009 included mostly (Points :
4)
Increases in taxes and government spending
Decreases in taxes and government spending
Increases in government spending and decreases in taxes
Decreases in government spending and increases in taxes
(TCO 6) The lag between the time the need for fiscal action is recognized and the time
action is taken is referred to as the (Points : 4)
Crowding-out lag
Recognition lag
Operational lag
Administrative lag
(TCO 5) An increase in expected future income will (Points : 4)
Increase aggregate demand and aggregate supply
Decrease aggregate demand and aggregate supply
Increase aggregate supply
Increase aggregate demand
(TCO 5) The long-run aggregate supply curve is (Points : 4)
Upward-sloping and becomes steeper at output levels above the full-employment output
Upward-sloping and becomes flatter at output levels above the full-employment output
Horizontal
Vertical

(TCO 5) If the price of crude oil decreases, then this event would most likely (Points : 4)
Decrease aggregate supply in the U.S.
Increase aggregate supply in the U.S.
Increase aggregate demand in the U.S.
Decrease aggregate demand in the U.S.
(TCO 5) Deflation refers to a situation where (Points : 4)
Price level falls
Price level rises
The rate of inflation falls
The rate of inflation rises
(TCO 6) If a family's MPC is .7, it means that the family is (Points : 4)
Operating at the break-even point
Spending seven-tenths of any additional income
Necessarily dissaving
Spending 70 percent of its disposable income
(TCO 7) As of January 2010, slightly more than half of the money supply (M1) was in the
form of (Points : 4)
Currency
Checkable deposits
Gold coins and bars
Savings deposits
(TCO 7) Which of the following "backs" the value of money in the United States? (Points :
4)
Gold stored in the Federal Reserve Bank of New York
Acceptability of it as a medium of exchange
Willingness of foreign government to hold U.S. dollars
Size of the budget surplus in the U.S. government
(TCO 7) How many members can serve on the Board of Governors of the Federal Reserve
System? (Points : 4)
Seven
Nine
12
14
(TCO 7) Which of the following is the most important function of the Federal Reserve
System? (Points : 4)
Setting reserve requirements
Controlling the money supply
Lending money to banks and thrifts
Acting as fiscal agent for the U.S. government
(TCO 7) The Federal funds rate is the rate that banks pay for loans from (Points : 4)
The Fed
The U.S. Treasury
Other banks
Large corporations
(TCO 7) The difference between Fed behavior during the Bank Panics of 1930-1933 and
the Financial Crisis of 2007-2008 is that the Fed (Points : 4)

Was very active during the former crisis, while it was basically passive during the latter crisis
Stood idly by during the former crisis, but took dramatic actions during the latter crisis
Was not yet in existence during the 1930s
Was a much bigger institution in the 1930s than it is today
(TCO 7) The purchase and sale of government securities by the Fed is called (Points : 4)
Federal funds market
Open market operations
Money market transactions
Term auction facility
(TCO 7) The Federal Reserve could reduce the money supply by (Points : 4)
Selling government bonds in the open market
Buying government bonds in the open market
Operating the term auction facility
Reducing the discount rate
(TCO 8) Which country is the United States' largest trading partner in terms of volume of
trade? (Points : 4)
Mexico
Japan
China
Canada
(TCO 8) The principal concept behind comparative advantage is that a nation
should (Points : 4)
Maximize its volume of trade with other nations
Use tariffs and quotas to protect the production of vital products for the nation
Concentrate production on those products for which it has the lowest domestic opportunity cost
Strive to be self-sufficient in the production of essential goods and services
(TCO 8) A tariff is a (Points : 4)
Tax
Price ceiling
Quantity limit
Subsidy
(TCO 8) A key difference between import quotas and voluntary export restraints (VERs) is
that the (Points : 4)
Domestic government administers the former, whereas the foreign government administers the
latter
Foreign government administers the former, whereas the domestic government administers the
latter
One is a tax, whereas the other is a quantity limit
One raises the price of the imported product involved, whereas the other one does not
(TCO 8) When tariffs on imported products are removed by a nation, it will result
in (Points : 4)
Higher prices and lower quantities consumed
Higher prices and quantities consumed
Lower prices and quantities consumed
Lower prices and higher quantities consumed

(TCO 8) Which organization meets regularly to establish rules and settle disputes related to
international trade? (Points : 4)
The United Nations Commission on Trade Law
The United Nations Conference on Trade and Development
The World Trade Organization
The Federal Reserve Board
(TCO 9) U.S. businesses are demanders of foreign currencies because they need them
to (Points : 4)
Produce goods and services exported to foreign countries
Pay for goods and services imported from foreign countries
Receive interest payments from foreign governments
Receive interest payments from foreign businesses
(TCO 9) Remittances of Mexican workers in the U.S. to their families in Mexico are
included in the U.S. balance of payments as a debit in the section on (Points : 4)
Trade in services
Net international transfers
Financial accounts
Capital accounts
(TCO 9) Comparing everything that the United States owes to other nations, and what they
owe to the United States, the United States is currently a(n) (Points : 4)
Net creditor
Net debtor
International banking asset
International banking liability
(TCO 9) Foreign exchange rates refer to the (Points : 4)
Price at which purchases and sales of foreign goods take place
Movement of goods and services from one nation to another
Price of one nation's currency in terms of another nation's currency
Difference between exports and imports in a particular nation
(TCO 9) When the exchange rate between pounds and dollars moves from $2 = 1 pound to
$1 = 1 pound, we say that the dollar has (Points : 4)
depreciated
Appreciated
Inflated
Deflated
(TCO 9) Which system would be accompanied by occasional currency interventions by
central banks to stabilize or alter rates to avoid persistent balance of payments deficits or
surpluses? (Points : 4)
Gold standard
Fixed exchange rates
Flexible exchange rates
Managed floating exchange rates
(TCO 8) a) Define the four basic types of trade barriers. b) Who gains and who loses from
a protective tariff? Explain. (Points : 40)
A protective tariff is a tariff that is designed…

(TCO 6) a) Identify the four major tools of monetary policy. b) How can monetary policy
address the problem of inflation? (Points : 40)
Monetary policy can either be expansionary or….
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ECON 312 Opportunity Cost and Economic Systems Discussions Week 1 All Students Posts
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ECON 312 Opportunity Cost Discussions 1 Week 1 All Students Posts 48 Pages DeVry
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Give an example of how the Principle of Opportunity Cost applies to your life. Think of a recent
decision you made. It could be a decision as simple as whether to eat out or cook your own
dinner, or it could be a decision to quit your job and go back to school. What alternatives did you
consider? How did you arrive at your final decision? Did you implicitly weigh marginal cost and
marginal benefit? How does the concept of opportunity cost apply to production possibilities
curve (PPC) analysis? How can we use PPC analysis to examine what we do?
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Think of a business firm you recently visited (such as Walmart, Home Depot, Red Lobster,
Barnes & Noble, McDonald’s, etc.). What motivated the producers of all the individual products
in the store to make them and offer them for sale? How did the producers decide on the best
combinations of resources to use? Who made those resources available, and why? How does the
market determine who will get the goods and services? Who decides whether these particular
products should continue to be produced and offered for sale? How do these decisions differ
between capitalist and socialist systems?
ECON 312 Demand, Supply, and Market Equilibrium and Price Elasticity of Demand
Discussions Week 1 All Students Posts 95 Pages DeVry
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ECON 312 Demand, Supply, and Market Equilibrium Discussions 1 Week 2 All Students
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Think about a product that you have purchased recently (e.g. soda, diapers, takeout meals, milk,
shoes, manicure/pedicure, video game, etc.). Explain how the law of demand affected your
purchase. Give specific examples of how the determinants of demand and supply affect this
product (T-I-P-E-N and P-R-E-S-T). What happens to the demand curve and the supply curve
when any of these determinants change? Give examples of scenarios that would cause a change
in demand versus a movement along the same demand curve and supply curve for this product.
Discuss the new equilibrium price and quantity that result from these changes. Can you
demonstrate some of these changes graphically?

ECON 312 Price Elasticity of Demand Discussions 2 Week 2 All Students Posts 40 Pages
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Think of another good that you have purchased recently (or you could continue with the good
you selected in TDA I). Be specific (e.g. is it breakfast cereal in general or Cheerios cereal
specifically). If the price of this item increases, how would this affect the quantity of the good
that you consume? Is the Demand for this good Price elastic or Price inelastic? Justify your
classification by talking about the determinants of elasticity as they apply to this product. Say
price is on the rise for this product and you are the manager of a store, would you be thrilled to
be selling this product? Under what circumstances would you want to own a business that sells
this product? In other words, how does an increase in price for this good affect your Total
Revenue? Using specific examples, relate the concepts of Cross Elasticity and Income Elasticity
to this product.
ECON 312 A Firm’s Shut Down Decision and Market Structure Classification Discussions
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Say you are the manager of a perfectly competitive firm selling a product. Your business is
making a loss because total revenue is less than total costs. What would you do--shut down or
continue to operate? Use hypothetical numbers to explain. Information you need to provide
include--state the product you are selling, the price of the product, the quantity of the product
you produce, fixed costs, total cost, figure out total revenue, total and average variable costs.
Then go ahead and make your decision. Explain carefully why it makes better sense to shut
down rather than continue to operate or to continue to operate rather than shut down, as the case
may be. How do fixed costs play a role in your analysis? What is the difference between shutting
down and going out of business?
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Think about a firm that you have done business with recently. What industry does this firm
belong to? For example, McDonald's is a firm in the fast food industry. What market structure
would this industry fall under? What are the names of other firms in this industry? Is it
monopolistic competition, oligopoly, monopoly, or perfect competition? Justify your
classification of the firm. Use the characteristics/features of the different market structure to
determine which market structure to classify your chosen firm.
ECON 312 GDP and Unemployment and Inflation Discussions Week 4 All Students Posts
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Go to the Bureau of Economic Analysis website, www.bea.gov, and access the BEA interactively
by selecting "National Accounts" and then "National Income and Product Account Tables."
Select "Frequently Requested NIPA Tables," and find Table 1.1.1 on GDP. What is the current
GDP growth rate for the U.S.? Examine the trend over the past few years. What trends interest
you? What stage of the Business Cycle would the U.S. economy be in currently given the trends?
Why might GDP not be considered an accurate measure of economic well-being of a country?
Identify at least three limitations of GDP as a measure of economic well-being.
ECON 312 Unemployment and Inflation Discussions 2 Week 4 All Students Posts 48 Pages
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Go to the Bureau of Labor Statistics website, www.bls.gov/news.release/empsit.toc.htm, and
click on "Employment Situation Summary" to get the most up-to-date summary of
unemployment in the U.S. or the "Employment Situation Summary Table A. Household data,
seasonally adjusted." What interests or surprises you about the summary table? How does that
rate compare with the rate in the previous month or quarter? Discuss the differences in
unemployment rates by gender, age, education, etc.
ECON 312 Aggregate Demand and Aggregate Supply and Fiscal Policy Discussions Week 5
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Go to the BEA website www.bea.gov. On the left tab under Publications, go to the Interactive
Data Tables. Select National Income and Product Accounts. From Table 1.1.6 and 1.1.7 examine
all four components of GDP (C, I, G, and Xn). Which of these four components of AD declined
the most during the 2007 and 2009 recession? Do you think an increase in government's
spending (G) can boost the Aggregate Demand (AD) in a recession? Analyze why the economy
may operate below full-employment GDP in the short run. How can the multiplier have a
negative effect? What is the relationship between the multiplier and the marginal propensities?
Explain.
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Give an example of an event or incident that has taken place in the U.S. economy which has a
major economic impact--be specific, e.g., 9/11 attack, natural disaster, rise or fall in oil prices
due to OPEC policies, consumer optimism or pessimism about an expected economic expansion
or downturn, increase in government spending on healthcare, tightening of the legal and
institutional environment, and so forth. What effect would this event have on AD or AS, other
things being constant? What would be the resulting effect on equilibrium price level?
Explain. What will be the effect of the different tools of fiscal policy to stabilize the economy?
Give an example of a built-in stabilizer and explain how it would work to reduce this rise or fall
in the level of AD.

ECON 312 Money and Banking and Monetary Policy and the Federal Reserve Discussions
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What factors led to the mortgage default crisis? How did mortgage defaults affect banks involved
in mortgage lending and mortgage investing? Securitization? TARP? What do these mean? How
did mortgage-backed securities spread losses during the mortgage default crisis? How does
TARP illustrate the problem of moral hazard? What did the Federal Reserve do during the
financial crisis of 2008 and 2009? How did the recent financial crisis affect the financial services
industry? What are some of the major provisions of the Wall Street Reform and Consumer
Protection Act?
ECON 312 Monetary Policy and the Federal Reserve Discussions 2 Week 6 All Students
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What is the Federal Reserve (Fed) all about? Which Federal Reserve District Bank is closest to
you? Who is the current Chairman of the Fed? Should the Fed remain independent from political
authority or should the President and Congress have a say in their operations? Why? Why not?
What is FOMC? What is the current Federal Funds Rate? How does the Fed implement monetary
policy to manage the economy? At the last meeting of the FOMC, what was done to the federal
funds rate--increased, decreased, or no change from previous meeting? Given the current state of
the U.S. economy, should the Fed be using expansionary monetary policy or contractionary
monetary policy? Why? Why Not?
ECON 312 Free Trade and Foreign Exchange Discussions Week 7 All Students Posts 73
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ECON 312 Free Trade Discussions 1 Week 7 All Students Posts 37 Pages DeVry
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Are you for or against free trade? Are you for or against NAFTA? What is the economic basis for
trade? Explain the underlying facts that support free trade and give an example of a good that
you purchased recently that is based on resource differences. What are some examples of goods
that the U.S. has comparative advantage in producing? Take a look at the tag of the
shirt/dress/pants you are wearing today. Where was it made? Anyone wearing “Made in
America” items of clothing today? We sometimes hear people say “Buy American." Why don't
we? What is the basis of international trade? What are the benefits and the costs? Under what
conditions would you advocate for trade restrictions?
ECON 312 Foreign Exchange Discussions 2 Week 7 All Students Posts 36 Pages DeVry
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What is happening to the value of the U.S. dollar these days? What causes the value of the U.S.
dollar to rise or fall? Who demands U.S. dollar? Who supplies U.S. dollar? When we purchase

German products, does our demand for euro go up or down? What are freely floating exchange
rates all about, and how do they work? How can the falling U.S. dollar impact your travel
expenses? Why would a cheap dollar relative to other nations' currencies be good or bad for U.S.
trade?