If the fundamental value of the exchange rate is less than the official (fixed) exchange rate, the country has an ________ problem, and it will ________ reserves.
A. undervaluation; lose
B. overvaluation; lose
C. undervaluation; gain
D. overvaluation; gain
Answer: B
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Does it follow from the false-paradigm model that World Bank economists are intentionally trying to keep developing countries from realizing genuine development? Why or why not?
What will be an ideal response?
A decrease in the interest rate shifts the money demand curve to the right
a. True b. False
The short run sequence of events following an unanticipated shift to a more expansionary monetary policy would be
a. lower interest rates, decrease in aggregate demand, and a reduction in output. b. lower interest rates, increase in aggregate demand, and an expansion in output. c. higher interest rates, decrease in aggregate demand, and a reduction in output. d. higher interest rates, increase in aggregate demand, and an expansion in output.
Which of the following reflects the concept of required reserves?
A. The money multiplier is greater than 1. B. Required reserves are equal to total reserves. C. Excess reserves are equal to 0. D. Banks can lend only their required reserves.