The money supply function reflects a positive relationship between the interest rate and the quantity of money supplied
a. True
b. False
Indicate whether the statement is true or false
False
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The International Monetary Fund (IMF) is an international organization designed to
A) promote world economic growth via loans to developed nations. B) promote world economic growth by means of greater financial stability. C) circulate a single currency worldwide. D) act as the world's central bank.
In the rational expectations model
a. markets are perfectly competitive and in equilibrium. b. markets may not clear even if wages and prices are otherwise perfectly flexible. c. markets may temporarily be in disequilibrium. d. only anticipated changes in aggregate demand affect output.
Assume you borrow $1,000 on credit cards at an annual interest rate of 10 percent. If the inflation rate is 12 percent during the year and the debt has to be paid back in 12 months, then:
a. income will be redistributed from you to the bank. b. the real return for the bank will be greater than initially expected. c. you will repay the bank with fewer dollars than you borrowed. d. the dollars repaid will have less purchasing power than those borrowed. e. the bank will obtain the same return on the loan as initially expected.
Which of the following is a disadvantage of the European Monetary Union to member countries?
A. Loss of some national identity B. Greater price transparency C. Greater clout for European consumers D. The expected creation of new reserve currency, the euro