Which of the policies of the U.S. Federal Reserve would most closely match the monetary policy most often used by the ECB?
A) open-market operations
B) discount policy
C) margin requirements
D) reserve requirements changes
Ans: B) discount policy
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According to Keynesian theory, the profit-maximizing firm demands labor up to the point at which
a. the real wage is equal to the marginal productivity of labor. b. the money wage paid to labor is just equal to the money value of the marginal product of labor. c. labor and capital costs are equal. d. a and/or b are correct.
If a nation experiences severe drought and real risk-free interest rate rises, then:
a. Aggregate demand rises, and aggregate supply falls. b. Aggregate demand rises, but aggregate supply does not change. c. Aggregate demand and aggregate supply fall. d. Neither aggregate demand nor aggregate supply change. e. None of the above.
If supply and demand both increase, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.
A. uncertain; higher B. higher; higher C. lower; uncertain D. lower; lower
If the real exchange rate rises 2%, domestic inflation is 3%, and foreign inflation is 1%, what is the percent change in the nominal exchange rate?
A. 6% B. 0% C. 4% D. 2%