When the U.S-foreign exchange rate appreciates in the short run and then depreciates slightly in the long run, it implies that the foreign money supply has:
a. temporarily risen.
b. permanently risen.
c. temporarily fallen.
d. permanently fallen
Ans: b. permanently risen.
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Answer the following statement true (T) or false (F)
Decisions regarding purchases and sales of government securities by the Fed are made by the:
a. Discount Committee (DC). b. Federal Open Market Committee (FOMC). c. Federal Funds Committee (FFC). d. Federal Deposit Insurance Commission (FDIC).
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A) not-for-profit firms B) government agencies C) platform firms D) non-transaction firms
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A) lower interest rates cause households and firms to switch from money to financial assets. B) lower interest rates cause households and firms to switch from financial assets to money. C) lower interest rates cause households and firms to switch from money to stocks. D) lower interest rates cause households and firms to switch from money to bonds.