When exchange rates are ________, we say that the country's exchange rate is fixed
A) determined in the market
B) set by a country's central bank
C) determined by supply and demand
D) relatively stable
Answer: B
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If the currency drain ratio is 30 percent and the desired reserve ratio is 10 percent, the money multiplier is
A) 0.80. B) 1.25. C) 3.25. D) 5.00. E) 10.0.
A minimum wage set above the equilibrium wage rate has no effect
Indicate whether the statement is true or false
Assume a closed economy with fixed taxes and the marginal propensity to consume is equal to 0.9. What is the government spending multiplier?
A) 10 B) 9 C) 5 D) 1
Recall the Application about productivity in the nation of Latvia in the 1990s to answer the following question(s). According to this Application, in the 1990s the European Community had ________ in the production of all products compared to Latvia.
A. an absolute advantage and a comparative advantage B. an absolute advantage but not a comparative advantage C. a comparative advantage but not an absolute advantage D. neither an absolute advantage nor a comparative advantage