Suppose a currency's value in the foreign exchange market is determined solely by market supply and demand without any intervention by the government authority, the currency has
A. a gold standard.
B. a price control in its exchange rate.
C. a fixed exchange rate.
D. a floating exchange rate.
Answer: D
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The __________ market liquidity is, the __________ the bid-asked spread will be
A) higher; wider B) lower; narrower C) higher; narrower D) None of the above.
In order to increase its target for the federal funds rate, the Fed would normally
A) conduct open market sales. B) conduct open market purchases. C) increase the discount rate. D) increase reserve requirements.
Oligopolists seldom change prices, because they don’t like change.
Answer the following statement true (T) or false (F)
Which of the following statements is not correct?
a. The median voter theorem explains why politicians appeal to the middle of the voting distribution. b. Based on studies of human decision making, most people prefer to procrastinate, both in the immediate future and in the distant future. c. Screening refers to an uninformed party trying to extract information from an informed party. d. Advertising can be an example of a company signaling the quality of its products.