There are limits to the ability of monetary authorities to use sterilized intervention in the case of a deficit because
A. the central bank's ability to constantly obtain foreign currency for the sterilized intervention is constrained.
B. the pressure from foreign countries to allow the domestic currency to appreciate will lead to large losses.
C. the export level is fixed and it cannot be allowed to drop.
D. the central bank may be unwilling to increase its holdings of foreign currency beyond a certain limit.
Answer: A
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A) borrowing in the bond market. B) borrowing in the loan market. C) lending in the stock market. D) lending in the bond market. E) lending in the loan market.
The Laffer curve depicts a basic idea of which of the following schools?
a. supply-side economics b. rational expectations c. Keynesian d. neo-Keynesian e. classical
If a state government reduces property taxes for residents at the same time that it increases the state income tax, what will happen to the expenditures schedule of the residents of this state?
a. It shifts upward. b. It shifts downward. c. It becomes less steep. d. It becomes steeper. e. It does not change.
In 1992 hurricanes damaged parts of Florida, Louisiana, and Hawaii, destroying homes, businesses, schools, and infrastructure. In strictly economic terminology, these hurricanes are said to have caused
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