The covered interest rate parity condition can be stated as follows: The interest rate on dollar deposits equals the interest rate on euro deposits ________ the forward ________ on euros against dollars
A) plus; premium
B) minus; premium
C) plus; discount
D) minus; discount
E) times; premium
A
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Suppose the government wants to maintain a balanced budget. To achieve this goal, when the economy falls into recession government would need to ________ taxes, which would cause aggregate demand to ________
A) increase; decrease B) decrease; increase C) decrease; decrease D) increase; increase
Which of the following is not a characteristic of a monopolistically competitive firm in long-run equilibrium?
A) Price is equal to average revenue. B) The firm has excess capacity. C) Marginal revenue is equal to marginal cost. D) Price is equal to marginal cost.
Reserves must be deposited in the Federal Reserve Banks by
A. only commercial banks which are members of the Federal Reserve System. B. all depository institutions, that is, all commercial banks and thrift institutions. C. state chartered commercial banks only. D. federally chartered commercial banks only.
A policy aimed at promoting the development of specific industries within a country that may increase domestic welfare through trade with the rest of the world is known as a(n):
A) infant-industry policy. B) key-industry policy. C) strategic trade policy. D) welfare-trade policy.