According to Hume's price-specie-flow mechanism, a sudden increase in the money stock of Country A:
a. causes an immediate deflation in Country A.
b. leads to an increase in Country A's imports relative to its exports.
c. leads to an increase in Country A's exports relative to its imports.
d. causes specie from the rest of the world to flow into Country A.
b. leads to an increase in Country A's imports relative to its exports.
You might also like to view...
When a natural monopoly is regulated using an average cost pricing rule, what can you say about the firm's profit and the market's efficiency?
What will be an ideal response?
What are the functions for MC and AC if TC = 100q + 100q2? Are the returns to scale increasing, decreasing, or constant?
What will be an ideal response?
If uncertainty causes commercial banks to increase their holdings of excess reserves, other things constant, this will
a. reduce the money supply during a period of inflation and increase it during a recession. b. reduce the size of the deposit expansion multiplier. c. increase the size of deposit expansion multiplier. d. reduce the size of the deposit expansion multiplier during a period of inflation and increase it during a recession.
Which of the following is a rare occurrence in case of poor performance by a company?
A. Firing the CEO B. Firing the lower-level management C. Firing the middle management D. Firing a few managers from the senior management