Could a country be open to international capital flows, control its domestic interest rate and fix its exchange rate? Explain.
What will be an ideal response?
No, if a country is open to international capital flows monetary policymakers must choose between controlling their exchange rate or controlling their interest rate; they cannot do both. If monetary policymakers want to control their domestic interest rate and their country is open to international capital flows, they must have a flexible exchange rate.
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Refer to Table 7-6. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many swords will Morocco gain compared to the "without trade" numbers?
A) 0 B) 15 C) 60 D) 75
The steel plow and horse-drawn reaper increased labor productivity on all farms, small and large
Indicate whether the statement is true or false
If a firm stops production, then its:
A. variable costs decrease to zero. B. fixed costs stay the same. C. total costs decrease. D. All of these are true.
Government purchases include spending on goods and services by
a. the federal government, but not by state or local governments. b. federal and state governments, but not by local governments. c. federal, state, and local governments. d. federal, state, and local governments, as well as household spending by employees of those governments.