The Speculative Attack on the German Mark in 1971 Resulted

question 42

Multiple Choice

The speculative attack on the German mark in 1971 resulted in

• A)a large increase in the German monetary base.
• B)a decline in the value of the mark relative to the dollar.
• C)a decision to end the floating of the mark against the dollar.
• D)a large decrease in the German monetary base.

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Definitions:

Law of Diminishing Marginal Utility

states that as a person consumes more of a good or service, the utility (satisfaction) gained from each additional unit decreases.

Principal-agent Problem

A dilemma occurring when one person or entity (the agent), is able to make decisions on behalf of, or that impact, another person or entity: the principal.

Complementary Resource

A good or service that enhances the use or value of another good or service when the two are used together.

Productivity

A measure of the efficiency of production, often expressed as the ratio of outputs to inputs in a given timeframe.