The term “dirty float” is used to describe a
A. black market in foreign currencies.
B. floating currency that is “managed” by central bank authorities.
C. nation that switches from free to fixed exchange rates.
D. currency system used only in inflationary periods.
Answer: B
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An economy characterized by high unemployment is likely to be
A. having a recessionary expenditure gap. B. having an inflationary expenditure gap. C. experiencing hyperinflation. D. experiencing a high rate of economic growth.
During 2008 the supply of gasoline decreased while at the same time the demand for gasoline increased If the magnitude of the increase in demand was greater than the magnitude of the decrease in supply, then the equilibrium price of gasoline ________ and the equilibrium quantity ________.
A) increased; increased B) increased; decreased C) increased; did not change D) decreased; did not change E) did not change; increased
In the simplest Keynesian model of the determination of income, interest rates are assumed to be
A) exogenous and to gradually change. B) endogenous and to gradually change. C) exogenous and to remain constant. D) endogenous and to remain constant.
The United States is best known as a
A) pure price system. B) dictatorship. C) command and control system. D) mixed economic system.