Because central banks intervene in currency markets, the term ____ has been used to describe the system.
A. planned float
B. controlled float
C. flexible
D. dirty float
Answer: D
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Which of the following is true with regard to the supply of money?
A) an open market sale of government securities will increase liquidity B) an open market purchase of government securities will decrease liquidity C) liquidity and the money supply are directly related D) all of the above E) none of the above
Assume the economy is in recession, the MPC is 0.80, and an increase of $200 billion in spending is needed in order to reach full employment. The target can be reached if government spending is increased by:
a. $20 billion. b. $200 billion. c. $80 billion. d. $40 billion.
In a certain economy, when income is $100, consumer spending is $60 . The value of the multiplier for this economy is 4 . It follows that, when income is $101, consumer spending is
a. $60.25. b. $60.75. c. $61.33. d. $64.00.
Which of the following statements is not correct?
a. Novels are likely to be produced in a monopolistically competitive industry.
b. Cable television is likely to be produced in a monopoly industry.
c. Milk is likely to be produced in a monopolistically competitive industry.
d. Cigarettes are likely to be produced in an oligopoly industry.