Which of the following variables that affect the money stock are outside the direct control of the Federal Reserve?
a. Currency/deposit ratio
b. Excess reserve/deposit ratio
c. Required reserve/deposit ratio
d. The speed of the money creation process.
e. Both a and b
E
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The scenario in which the trade deficit slowly shrinks over time is called the
a. soft-landing scenario. b. hard-landing scenario. c. fair-trade scenario. d. free-trade scenario. e. protectionist scenario.
A perfectly competitive firm should continue to expand output until
a. total revenue exceeds total costs. b. total revenue exceeds variable costs. c. marginal revenue equals marginal costs. d. average revenue equals variable costs.
Which of the following is part of the synthesis view of fiscal policy?
a. Automatic stabilizers offset some of the fluctuations in aggregate demand without any government action. b. Fiscal policy is much less potent than the early Keynesian view implied. c. The effectiveness of discretionary fiscal policy as a stabilization tool is highly questionable given the difficulties in proper timing. d. All of the above are correct. e. None of the above is correct.
Considering the theory of purchasing power parity, if inflation in Mexico is 5% while prices in the U.S. are stable; we should expect over the period of a year:
A. the dollar to appreciate 5% relative to the peso. B. the peso to appreciate 5% relative to the dollar. C. the real exchange rate of U.S. goods / Mexican goods to appreciate 5%. D. the nominal exchange rate to stay fixed.