The balance of payments constraint refers to the limits on:
A. exchange rate policy imposed by flexible exchange rates.
B. currency convertibility observed in most developing countries.
C. domestic macroeconomic policy, arising from a shortage of international reserves.
D. macroeconomic policy resulting from IMF conditionality.
Answer: C
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A principle is a self-evident truth that most people readily understand and accept
Indicate whether the statement is true or false
Total revenue cannot be derived from the demand curve or a demand schedule.
Answer the following statement true (T) or false (F)
Required reserves are
A. equal to total reserves minus excess reserves. B. equal to total reserves minus checkable deposits. C. always less than total reserves. D. determined by multiplying the level of checkable deposits times the discount rate.
For an efficient outcome, MR must exceed MC.
Answer the following statement true (T) or false (F)