The purchase of VCU2 by Tomas Tiergarten, a private resident, causes the nation's:
a. Monetary base to rise.
b. M2 money supply to rise.
c. M2 money multiplier to rise.
d. Monetary base to remain the same.
.D
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Currency traders expect the value of the dollar to fall. What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?
A) Demand for dollars will increase, and supply of dollars will increase. B) Demand for dollars will decrease, and supply of dollars will decrease. C) Demand for dollars will increase, and supply of dollars will decrease. D) Demand for dollars will decrease, and supply of dollars will increase.
In an economy in which real output grows at an average rate of 3 percent per year, a 7 percent average rate of growth in the money supply would result in a(n): a. inflation rate of 4 percent, if velocity of money in circulation is constant. b. inflation rate of -4 percent, if velocity of money in circulation is constant. c. $7 increase in the price level each year
d. $7 decrease in the price level each year. e. increase in the velocity of money in circulation.
The amount of time it takes for fiscal policy to have an impact on the economy creates:
A. an information lag. B. a formulation lag. C. an implementation lag. D. a direction lag.
Leverage is thought to be:
A. a dangerous tool, especially for big companies who do not understand its risk. B. the most widely used of hedging risk in markets. C. the single reason for the Great depression. D. a relatively riskless strategy used by companies to grow quickly.