What is the basic goal of creating and adopting the euro?
A. To reduce the economic inefficiencies of exchanging currencies
B. To stabilize the level of prices among nations of the European Union
C. To give Europeans more trade protection from businesses in the United States
D. To comply with the requirement for admission to the World Trade Organization
A. To reduce the economic inefficiencies of exchanging currencies
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Past expenses are irrelevant to supply decisions, because
A) expenses incurred in the past never affect the opportunities available in the present. B) it is essential to avoid bankruptcy. C) no one remembers the past. D) supply decisions depend on opportunities that will have to be forgone, not opportunities already forgone.
The ability of a central bank to set monetary policy instruments is
A) political independence. B) goal independence. C) policy independence. D) instrument independence.
Hedge funds have been criticized for
A) their heavy use of short selling. B) their inability to mobilize a large amount of funds. C) forcing quick price changes that reduce market inefficiencies. D) excessive use of hedging strategies.
All of the following are advantages of currency pegging EXCEPT
A) it reduces exchange rate risk. B) it is a check against inflation. C) it provides protection for firms that have taken out loans in foreign currencies. D) it keeps the exchange rate closer to its equilibrium rate.