A country, such as Argentina in 2002, that is buying its own currency to maintain a given exchange rate
A. has a balance of payments surplus.
B. has an undervalued currency.
C. has an overvalued currency.
D. need not fear a “run” on its currency.
Answer: C
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Nominal GDP, PY, is $7.5 trillion. The quantity of money is $3 trillion. The velocity of circulation is
A) 22.5. B) 10.5. C) 2.5. D) 3.
What is the key proposition of new growth theory that makes economic growth persist?
What will be an ideal response?
If the elasticity of substitution of a production function is equal to zero, then this production function is a
A) linear production function B) fixed proportion production function C) Cobb-Douglas production function D) None of above.
If supply and demand both decrease, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.
A. lower; uncertain B. higher; higher C. uncertain; lower D. lower; lower