Which of the following is least likely to lead to inflationary monetary policy?
A) rising unemployment
B) expanding federal budget deficits
C) declining oil prices
D) conflict in the Middle East
C
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Suppose you solve a consumer's constrained 2-good optimization problem for a given economic environment --- and your answer contains a negative consumption level of good 2. Which of the following is a valid conclusion on your part:
A. The true optimum has the consumer consume none of good 1. B. The true optimum has the consumer consume none of good 2. C. There are multiple "true" optimal consumption bundles. D. The consumer will sell good 2. E. None of the above.
The condition where firms want to sell more than consumers want to buy is called
A. a market collapse. B. an equilibrium. C. a shortage. D. a surplus.
What is included in M2 that is not included in M1?
What will be an ideal response?
In August 2015 investor sentiment shifted against the Chinese yuan. Investors sold the yuan and bought dollars, as financial capital flowed out of China, seeking better rates of return in other countries. What actions did China take in response to this situation?
A. China sold the yuan to encourage further depreciation in an attempt to improve its trade deficit. B. China used $1 trillion of its foreign exchange reserves to purchase the yuan in an attempt to prevent further devaluation and tightened capital controls on financial outflows. C. China's monetary authority sold the yuan in an attempt to prevent further devaluation and raised interest rates to stem the outflow of foreign capital. D. China loosened capital controls to encourage foreign investment into the Chinese economy.