The biggest disadvantage of a fixed exchange rate is the
A) increased probability of high inflation.
B) tradeoff between supporting the exchange rate and adjusting the trade balance.
C) tradeoff between supporting the exchange rate and maintaining economic growth.
D) increased probability of a trade deficit.
E) tradeoff between supporting the exchange rate and maintaining a balanced budget.
C
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The Fed buys $100 million of government securities from Bank A. What is the effect on Bank A's balance sheet?
A) Securities decrease by $100 million and reserves increase by $100 million. B) Securities decrease by $100 million and deposits decrease by $100 million. C) Securities increase by $100 million and reserves decrease by $100 million. D) Securities increase by $100 million and reserves increase by $100 million.
The Coase Theorem points out that for an efficient outcome to result, it is irrelevant which party receives the property rights
Indicate whether the statement is true or false
Refer to Figure 12-5. If the market price is $20, what is the firm's profit-maximizing output?
A) 750 units B) 1,100 units C) 1,350 units D) 1,800 units
If firms increase investment, the aggregate expenditures function will shift upward, other things being equal
a. True b. False Indicate whether the statement is true or false