Under the Bretton Woods system, countries experiencing current account surpluses
A. were obliged to revalue their currencies.
B. could maintain their fixed exchange rate by selling excess foreign exchange.
C. were obliged to stimulate their economies.
D. could maintain their fixed exchange rate by buying excess foreign exchange.
Answer: D
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Figure 4-23
In Figure 4-23, which of the following movements would be caused by a change in income?
A. A to C B. C to A C. B to D D. B to A
If investment in an economy falls, which of the following is likely to happen?
A) Labor demand will increase. B) The revenue of firms in the economy will fall. C) Asset prices will rise. D) The number of mortgage defaults will fall.
Free market economists
A) believe in the fundamental stability of the economy. B) believe that government policy can create a stable economy. C) and Keynesians hold the same macroeconomic views. D) believe that the Federal Reserve is the source of economic stability.
Which of the following will always cause an increase in net exports?
A) a reduction in domestic output B) an increase in the real exchange rate C) an increase in government spending D) an increase in investment E) all of the above