A gold standard pegs the currency to:
A) another nation that also adopts a gold standard.
B) a basket of metals: gold, silver, platinum, and palladium.
C) the price of gold in local currency.
D) the U.S. dollar.
Ans: C) the price of gold in local currency.
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The annual price of a one dollar loan is referred to as the:
A) service tax. B) rate of interest. C) discount value. D) principal.
Which of the following is true of an extensive-form game?
A) The sum of the payoffs to the players in the game is always constant. B) It involves simultaneous decision making by the players. C) It involves sequential decision making by the players. D) The players in the game earn equal payoffs in equilibrium.
Refer to Figure 9-4. Suppose the government allows imports of leather footwear into the United States. What will the market price be?
A) > $24 B) $24 C) $30 D) $54
Under which circumstance is the Fed most likely to carry out a defensive open market operation?
A) to prevent an increase in inflation B) if a snowstorm results in a delay in check clearing, resulting in an increase in the Federal Reserve float C) to defend the value of the U.S. dollar on the foreign exchange market D) to prevent the negative impact of a demand shock