If there is an excess supply of the domestic currency at a fixed exchange rate,
a. the currency will undergo a devaluation
b. the currency will appreciate
c. the country must switch to a floating exchange rate
d. the central bank must buy up that excess supply or the exchange rate will fall
e. the central bank must be up that excess supply or the exchange rate will rise
D
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An advantage of the personal consumption expenditures price index (PCE) over the Consumer Price Index (CPI) as a measure of inflation is that the PCE
A) is a fixed market-basket price index that does not allow the mix of products to change each year. B) includes the prices of consumer services, but not consumer goods. C) includes the prices of more consumer goods and services. D) includes the prices of consumer goods, but not consumer services.
Forward guidance refers to:
A. a process similar to open-market purchases. B. lending of reserves by the Federal Reserve to commercial banks. C. information that a central bank provides to the financial markets regarding its expected future monetary policy path. D. a process similar to open-market sales.
The Federal reserves Open Market Committee currently meets:
A. monthly. B. bi-weekly. C. once every quarter, unless a crisis warrants more frequent meetings. D. eight times a year.
Market failures may be corrected through government intervention.
Answer the following statement true (T) or false (F)