If there are no reserves, domestic adjustments to payment imbalances under fixed exchange rates require surplus countries to forsake full employment and deficit countries to forsake price stability.
Answer the following statement true (T) or false (F)
False
If there are no reserves, domestic adjustments to payment imbalances under fixed exchange rates require surplus countries to forsake price stability and deficit countries to forsake full employment.
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The starting point for understanding how exchange rates are determined is a simple idea called ________, which states: if two countries produce an identical good, the price of the good should be the same throughout the world no matter which country
produces it. A) Gresham's law B) the law of one price C) purchasing power parity D) arbitrage
Suppose that 19th-century politicians had succeeded in their attempt to impose a "single tax"-a tax on suppliers of land (i.e., landlords). Most of the economic burden of the tax would have been borne by
a. renters, because the demand for land is generally less elastic than its supply. b. renters, because the demand for land is generally more elastic than its supply. c. landlords, because the demand for land is generally less elastic than its supply. d. landlords, because the demand for land is generally more elastic than its supply.
The purchase of VCU2 by Tomas Tiergarten, a private resident, causes the nation's:
a. Monetary base to remain the same. b. M2 money supply to fall. c. M2 money multiplier to fall. d. M2 money supply to rise.
Which of the following is an accurate statement about a firm operating at a loss?
a. It will stay open in the short run if its total revenue does not cover variable costs. b. It will stay open in the short run if its total revenue covers variable costs but not all fixed costs. c. It will shut down in the short run if its total revenue exceeds variable costs. d. It will shut down in the short run if its total revenue cannot cover both variable and fixed costs.