Assume a country experiences heavy capital outflows. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions? Assume the exchange rate is stated as: (Domestic currency/Foreign currency)
a. Start the analysis in the foreign exchange market with demand shifting to the right.
b. Start the analysis in the foreign exchange market with supply shifting to the left.
c. Start the analysis in the foreign exchange market with supply shifting to the right.
d. Start the analysis in the real credit market with demand shifting to the left.
e. Start the analysis in the real credit market with demand shifting to the right.
.C
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Refer to Figure 15-2. In the figure above, the movement from point A to point B in the money market would be caused by
A) an open market sale of Treasury securities by the Federal Reserve. B) a decrease in real GDP. C) an increase in the price level. D) a decrease in the required reserve ratio by the Federal Reserve.
The reason for calling the current exchange rate system a "managed float" is
a. it is managed by the IMF b. it is basically a misnomer because it is impossible to "manage" exchange rates c. it recognizes that there will be some intervention by central banks d. only the forces of supply and demand determine the exchange rates e. Congress passed a law declaring that the exchange rate system be legally termed "managed float"
The growth rate of potential GDP is the sum of the growth rates of
A. labor force and population. B. labor force and labor productivity. C. labor force and capital stock. D. labor productivity and capital stock.
Quantity of Frozen Latte-On-A-Stick SuppliedPriceFlo's SupplyRita's Supply10020334649951512
Refer to Table 3.1, which shows Flo's and Rita's individual supply schedules for frozen latte-on-a-stick. Assuming Flo and Rita are the only suppliers in the market, what is the market quantity supplied at a price of $1?
A. 0 B. 1 C. 3 D. 5