Suppose the government of New Country has fixed the value of its currency, the New Peso, at $1 per New Peso, but the market equilibrium value of the New Peso is $2 per New Peso. In order to maintain the official value of the New Peso the Central Bank of New Country must either ________ domestic interest rates, or ________ the supply of New Pesos by purchasing or increasing their holding of international reserves.
A. lower; decrease
B. raise; decrease
C. raise; increase
D. lower; increase
Answer: D
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The number of times a unit of currency changes hands for transactions in a given period is called
a) the transactions demand for money b) the money multiplier c) M1 d) GDP e) velocity
Monetary policy directed at expanding GDP growth would include the following?
A. Selling bonds and increasing the discount rate B. Buying bonds and increasing the discount rate C. Decreasing the discount rate and increasing the reserve requirement D. Decreasing the discount rate and buying bonds
What is the fundamental argument in Malthus' An Essay on the Principle of Population?
A. Ultimately, population growth rate would outpace growth in real GDP leading to declining standards of living. B. Population growth tends to undermine global stability which is a stimulus for future wars and conflicts. C. Population would increase at a geometric rate and the food supply at an arithmetic rate and that this disharmony would lead to forced return to subsistence-level conditions. D. Population growth is the root cause of hunger, poverty, environmental destruction, disease, and social unrest.
A firm that has increasing marginal output would be experiencing __________.
Fill in the blank(s) with the appropriate word(s).