When a country suffers from a speculative attack:
A. the supply of currency available shifts right.
B. it forces the government to spend its reserves to defend its fixed exchange rate.
C. it lowers the equilibrium exchange rate.
D. All of these statements are true.
Answer: D
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The steeper the short-run aggregate supply curve, _____
a. the smaller the impact of a shift in aggregate demand on equilibrium output b. the larger the value of the spending multiplier c. the larger the impact of a shift in aggregate demand on equilibrium output d. the smaller the change in government spending needed to achieve the desired change in equilibrium output e. the flatter the aggregate demand curve
In the housing market, rent control causes
A. quantity supplied and quantity demanded to fall. B. quantity supplied to fall and quantity demanded to rise. C. quantity supplied to rise and quantity demanded to fall. D. quantity supplied and quantity demanded to rise.
On a graph with consumption on the vertical axis and disposable income on the horizontal axis, the slope of the line is
A. greater than 1. B. equal to 1. C. less than 1. D. undefined.
Which of the following statements is true?
A) Firms usually tend to lay off workers than cut wages to reduce costs. B) Firms tend to increase wages in periods of contracting economic activity to boost morale. C) Firms tend to decrease wages in periods of contracting economic activity to boost labor productivity. D) Firms usually tend to cut wages than lay off people to cut costs.