One source of the supply of dollars in the foreign exchange market is
A) U.S. companies importing foreign goods.
B) foreign citizens buying U.S. goods.
C) SDRs being converted into dollars.
D) the U.S. Mint buying dollars from the Bank of England.
Answer: A
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If the Federal Open Market Committee wants to decrease the money supply through open market operations it will
A) buy U.S. Treasury Securities. B) decrease the discount rate. C) sell U.S. Treasury Securities. D) increase the discount rate.
Which of the following properties must a good have to be used as money?
A) It should be a durable good. B) It should be issued by a government of central bank. C) It should have intrinsic value. D) It should be shiny.
Which one of the following statements is not true? a. There is an opportunity cost associated with setting a money supply target. b. There is an opportunity cost associated with setting an interest rate target. c. When the Fed targets the money supply, the interest rate moves in an inappropriate direction.` d. The Fed targeted the money supply in the 1980s in order to bring inflation under
control. e. The Fed targeted interest rates in the late 1980s and 1990s in order to stimulate investment and aggregate demand.
An increase in aggregate demand leads to the strongest increase in the price index, when the economy is in the:
a. Classical range. b. Keynesian range. c. Intermediate range. d. There is not enough information to tell. e. None of the above.