Following an expansion of the money supply, a government committed to maintaining a fixed exchange rate must
A. intervene in the foreign exchange market to sell foreign currency and buy domestic currency.
B. accept a surplus in its current account.
C. increase its level of government expenditure and autonomous investments.
D. not use sterilized intervention.
Answer: A
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If an increase of $10 million in excess reserves increases checkable deposits in the banking system by a maximum of $200 million, the required reserve ratio is: a. 0
b. 5 percent. c. 10 percent. d. 20 percent. e. 2 percent.
An increase in aggregate demand would move the economy up and to the right along a short run aggregate supply curve and up and to the left along a Phillips Curve
a. True b. False Indicate whether the statement is true or false
If the dollar depreciates relative to other currencies, which of the following is true? a. It takes more of the other currency to buy a dollar
b. It takes less of the other currency to buy a dollar. c. There is no change in the amount of the currency needed to buy a dollar. d. Not enough information to determine.
The firm's break-even point is
A. at point J.
B. at point K.
C. between points J and K.
D. above point K.