Advocates of flexible exchange rates claim that under flexible exchange rates, a currency
A) appreciation caused by increasing the money supply would reduce unemployment by lowering the relative price of domestic products.
B) depreciation caused by increasing the money supply would increase unemployment by lowering the relative price of domestic products.
C) depreciation caused by increasing the money supply would reduce unemployment by lowering the relative price of domestic products.
D) depreciation caused by increasing the money supply would reduce unemployment by increasing the relative price of domestic products.
E) depreciation cause by decreasing the money supply would not effect unemployment, but would increase the relative price of domestic products.
C
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Evaluate the following statement: "Water is plentiful, therefore it can't be a scarce resource like oil which is not as plentiful."
What will be an ideal response?
The sum of consumption (C), investment (I), government spending (G), and net exports (X-M) is called:
a. autonomous spending. b. aggregate expenditures. c. Keynesian income d. wealth.
Are "smart cards" or E-cash cards part of the money supply?
a. Yes, because they can be given away to make a payment. b. Yes, because they will soon completely replace cash. c. No, because they are not issued by banks. d. No, because they are merely means to transfer checking deposits.
Something that induces a person to act is called
a. a trade-off. b. a policy. c. an incentive. d. an opportunity cost.