Suppose that the Bank of Japan buys U.S. dollar assets with yen-denominated assets. Everything else held constant, this transaction will cause ________ in the foreign assets held by the Federal Reserve and ________ in the U.S. monetary base
A) an increase; an increase
B) an increase; a decrease
C) a decrease; an increase
D) a decrease; a decrease
A
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Why does the money supply increase when the Fed buys a bond but does not change when a business buys a bond?
What will be an ideal response?
During hyperinflation, exploding inflation causes real money demand to
A) fall over time, and this additional monetary change makes money prices rise even more quickly than the money supply itself rises. B) increase over time, and this additional monetary change makes money prices rise even more quickly than the money supply itself rises. C) fall over time, and this additional monetary change makes money prices decrease even more quickly than the money supply itself rises. D) increase over time, and this additional monetary change makes money prices decrease even more quickly than the money supply itself rises. E) fall over time, and this additional monetary change makes money prices decrease even less quickly than the money supply itself rises.
The "greater fool" theory assumes that
A) markets are efficient. B) bubbles cannot exist in well-organized markets. C) it makes sense for an investor to buy an asset as long as there is someone else to buy it later for a higher price. D) bond market returns are always above stock market returns.
Which of the following is responsible for Spain's eventual decline in influence?
a. The lack of a solid foundation for its settlement efforts b. A costly war to bring the Low Countries under subjection c. The decline in gold and silver imports from America d. All of the above