With flexible exchange rates, the imbalance between debits and credits arising from shifts in currency demand and/or supply is accommodated through special financial borrowings or reserve movements
a. True
b. False
Indicate whether the statement is true or false
False
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U.S. net exports include
A) sales of Hollywood movies to the rest of the world. B) the production of Ford Mustangs in China that are sold in China. C) Honda automobiles produced and sold in Japan. D) the sale of shares of Nike stock on the New York Stock Exchange. E) the sale of U.S. government securities to U.S. citizens.
When the growth rate of the money supply is increased, interest rates will fall immediately if the liquidity effect is ________ than the other money supply effects and there is ________ adjustment of expected inflation
A) larger; fast B) larger; slow C) smaller; slow D) smaller; fast
Private schools are able to exclude students from attending classes they offer unless students have been accepted and paid tuition and fees. This suggests that education is
A) subject to the principle of rival consumption. B) subject to the free-rider problem. C) not subject to the exclusion principle. D) a public good.
If the Fed were to allow unemployment to remain at a higher level than NAIRU:
A. the dual mandate would be violated. B. It would lead to deflation. C. they would fail to maintain full employment. D. All of these statements are true.