Suppose policy makers are pursuing a policy to fix the exchange rate. In such a system with perfect capital mobility, an open market sale of domestic bonds by the domestic central bank will eventually result in
A) a permanent increase in the monetary base.
B) a permanent reduction in the monetary base.
C) a gradual reduction in the domestic interest rate.
D) a change in the composition of the monetary base.
D
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If the Fed's policy is contractionary, it will
A) use open market operations to sell Treasury bills. B) lower the reserve requirement. C) use open market operations to buy Treasury bills. D) lower the discount rate.
In games, rules:
A. define the actions that are allowed in a game. B. need to be loosely adhered to in order to predict an outcome. C. define the winners of a game. D. outline the wrong choices that could be made in a game.
Which of these is most likely to shift the long-run aggregate supply curve to the left?
a. An increase in the average workweek b. An improvement in technology c. A civil war d. A decrease in aggregate demand e. A decline in global oil prices
David consumes 140 in the current period and 220 in the future period. David's present value of lifetime consumption is 340. The real interest rate is
A. 20%. B. 10%. C. 5%. D. 0%.