According to the quantity theory of money, inflation causes an increase in the money supply
Indicate whether the statement is true or false
FALSE
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Money cannot serve as a medium of exchange unless it also serves as a store of value. Is this statement true or false? Explain
What will be an ideal response?
Under some circumstances, trade could stifle the development of new industries and reduce global efficiency. All of the following describe conditions that could lead to that situation EXCEPT
A) an initial head start gives a scale advantage to already existing firms in one country. B) diseconomies of scale make it impossible for new firms to enter the market. C) a location has a better-developed linkage between suppliers and producers, giving it a cost advantage. D) a historical accident, such as the shifting of airplane production to the United States to avoid World War II bombings, causes firms in one location to have a competitive advantage.
Which type of main institution in the international capital market most often is involved in foreign exchange intervention?
A) central banks B) non-bank financial institutions C) insurance companies D) corporations E) commercial banks
Under a fixed exchange rate system, at low domestic real interest rates the demand for domestic currency ________, so the central bank ________ foreign-exchange reserves
A) increases; acquires B) increases; loses C) decreases; acquires D) decreases; loses