Describe the effect of the 2008-2009 global financial crisis on the Swiss franc and the central bank's efforts to respond to the resulting problems
What will be an ideal response?
The 2008-2009 global financial crisis resulted in appreciation of the franc as currency traders purchased the franc as a safe haven currency. The Swiss economy consequently suffered as its products became less competitive with imports. The Swiss responded by committing to currency intervention designed to control appreciation of the franc and restore the country's competitiveness in global markets.
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Which of the following is "crowded out" by higher interest rates that can be the result of expansionary fiscal policy?
A) net exports B) private investment C) consumption D) All of the above are crowded out by higher interest rates.
If a production possibilities frontier (PPF) is concave outward, it follows that
A) opportunity costs are constant between two goods. B) the opportunity cost (of producing the good on the horizontal axis) rises as more of the good is produced. C) the opportunity cost (of producing the good on the horizontal axis) falls as more of the good is produced. D) the opportunity cost (of producing the good on the horizontal axis) first rises and then falls as more of the good is produced. E) none of the above
A change in which of the following variables will have no direct effect on domestic demand?
A) domestic income B) foreign income C) government spending D) the interest rate (r) E) none of the above
Chairmen of the Federal Reserve Board
A) serve 14-year terms as chairmen. B) serve 4-year renewable terms as chairmen. C) also serve as members of the administration. D) serve 4-year non-renewable terms as chairmen. E) none of the above