The exchange rate states the price, in terms of one currency, at which another currency can be bought
a. True
b. False
Indicate whether the statement is true or false
True
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All of the following would increase the growth rate of the economy EXCEPT
A) raising the saving rate. B) stimulating research and development. C) discouraging international trade. D) None of the above answers is correct because they all would increase the growth rate.
When the Fed sells government securities, it
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans b. raises the cost of borrowing from the Fed, discouraging banks from making loans c. increases the amount of excess reserves that banks hold, encouraging them to make loans d. increases the amount of excess reserves that banks hold, discouraging them from making loans e. decreases the amount of excess reserves that banks hold, discouraging them from making loans
Moral hazard and adverse selection are similar asymmetric information problems but moral hazard involves hidden actions while adverse selection involves hidden characteristics
a. True b. False Indicate whether the statement is true or false
When disposable income is 3,000, savings is
A. 1,000
B. 750
C. 500
D. 0