Fixed exchange rates are often maintained by using all of the following except:
A. Open speculation by individual traders in foreign currency markets
B. International monetary reserves held by central banks
C. Controls on imports and exports such as tariffs and quotas
D. Domestic macroeconomic adjustments using monetary and fiscal policies
A. Open speculation by individual traders in foreign currency markets
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According to the intertemporal substitution effect, a fall in the price level will
A) decrease the real value of wealth, which increases the quantity of real GDP demanded. B) cause the interest rate to fall so that investment increases and the quantity of real GDP demanded increases. C) increase net exports, which causes the quantity of real GDP demanded to increase. D) increase the real value of wealth, which raises the interest rate so that the quantity of real GDP demanded decreases.
In a free market the quantity demanded will not exceed the quantity supplied of a resource, even if it is undergoing rapid depletion
a. True b. False Indicate whether the statement is true or false
If the price elasticity of demand for chicken is 2, then a 20% decrease in the price of chicken will lead to a:
A. 10% decrease in the quantity demanded of chicken. B. 40% decrease in the quantity demanded of chicken. C. 40% increase in the quantity demanded of chicken. D. 10% increase in the quantity demanded of chicken.
A situation in which union membership is required before a person can be hired is a
A) closed shop. B) union shop. C) agency shop. D) restricted shop.