An alternative to maintaining an overvalued currency is to ________ the fundamental value of the exchange rate by ________ monetary policy.
A. increase; easing
B. decrease; tightening
C. decrease; easing
D. increase; tightening
Answer: D
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Refer to Figure 8.3. Holding other variables constant, if the economy is originally in equilibrium at the intersection of D1 and S1 and firms experience an increase in technology of production, the economy would move to the new equilibrium point
represented by A) w1 and L2. B) w3 and L2. C) w2 and L2. D) w2 and L3.
The poverty trap refers to:
A. poorer countries having a harder time buying the things that will end their poverty. B. richer countries spiraling downward into poverty if they invest in the wrong industries. C. richer countries spiraling downward into poverty if they fail to invest enough in physical capital. D. All of these describe the poverty trap.
The idea of rational ignorance implies that people are fully informed about their market purchases but uninformed about political issues
a. True b. False Indicate whether the statement is true or false
In 1998, Japan decided to make the Bank of Japan, its central bank,
a. more independent. b. more concerned with fighting inflation. c. subject to direct control by the Japanese prime minister. d. subject to direct control by the Diet, the Japanese parliament.