Use a figure to show the effect of a sterilized central bank purchase of foreign assets under the imperfect asset substitutability assumption
What will be an ideal response?
The interest parity condition is given by
R = R* + ( - E)/E +
Suppose that the domestic assets of the central bank fall from to through a sterilized purchase of foreign assets. Then the risk-adjusted return increases and the exchange rate increases.
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If two goods have a ________ cross-price elasticity of demand, then the antitrust agencies can conclude that the products ________ compete in the same market as strong substitutes.
A) large; do not B) small; do C) zero; do D) large; do
Which of the following is a positive externality of consumption?
a. inoculations against a disease reduce the likelihood of transmitting it to others b. phosphates from laundry detergents c. litter from fast-food containers d. ozone depletion from the production of fast-food containers e. the greenhouse effect
Recall the Application about the behavior of prices in retail catalogs to answer the following question(s). In the Application, findings by Anil Kasyap showed that even though the catalogs listed in the Application were reissued every six months, the prices which were tracked in these retail catalogs:
A. were typically fixed for a year or more. B. changed every month. C. tended to fall during periods of high inflation. D. were not listed due to low rates of inflation.
Table 16.1If each firm depicted in Table 16.1 is currently generating 1,000 gallons of wastewater per day, Firm A would need to be paid at least ________ from Firm B to reduce wastewater production to 0 gallons per day.
A. $20 B. $15 C. $12 D. $3