Which is likely to be larger, the velocity of M1 or M2?
A. M1, because M2 is a larger number.
B. M2, because M1 is a larger number.
C. The velocities of both are approximately equal.
D. The numbers of velocity switch in relative size.
Answer: A
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A coupon bond has an annual coupon of $75, a par value of $1000, and a market price of $900. Its current yield equals
A) 7.50%. B) 8.33%. C) its yield to maturity. D) Not enough information has been provided to calculate the current yield for this bond.
Which of the following statements is correct?
A) New classicals believe that the aggregate supply curve is vertical in the short run. B) New Keynesians believe that the aggregate supply curve is vertical in the short run. C) New Keynesians believe that the aggregate supply curve slopes upward in the long run. D) New classicals believe that the aggregate supply curve slopes upward in the short run.
By how much does the real, bilateral exchange rate change when the nominal, bilateral exchange rate changes from $1.10/€ to $1.00/€, the U.S. tradable basket from $500 to $600 and the Euro-Area tradable basket from €550 to €580?
a. The real exchange rate rises approximately by 18%. b. The real exchange rate falls approximately by 3% c. The real exchange rate rises approximately by 3% d. The real exchange rate falls approximately by 20% e. The real exchange rate falls approximately by 18%
If speculators with Swiss francs believed the yen was going to depreciate against the dollar, they would most likely: =
A. Purchase euros. B. Purchase dollars. C. Not participate in foreign exchange markets because of the volatility. D. Purchase yen.