Which of the following describes the role of the government in a fixed exchange rate regime?
a. establishing capital controls
b. controlling budget deficits
c. buying and selling of currency by the central bank
d. expanding the money supply
Ans: c. buying and selling of currency by the central bank
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According to Kuznets (1954), competition will
(a) unfairly destroy leading industries and impede overall economic growth across industries. (b) require government intervention. (c) push efficient industries into leadership roles and pull the backward and forward industrial links to these leaders with them. (d) contract consumer market opportunities.
Private enterprise plays some role in production decisions for
A. all countries in the world. B. few countries in the world. C. about half of the countries in the world. D. most countries in the world.
If U.S. residents purchase $600 billion worth of foreign assets and foreigners purchase $300 billion worth of U.S. assets,
a. U.S. net capital outflow is $300 billion; capital is flowing into the U.S. b. U.S. net capital outflow is $300 billion; capital is flowing out of the U.S. c. U.S. net capital outflow is -$300 billion; capital is flowing into the U.S. d. U.S. net capital outflow is -$300 billion; capital is flowing out of the U.S.
Leverage is thought to be:
A. the single reason for the Great depression. B. a dangerous tool, especially for big companies who do not understand its risk. C. the most widely used of hedging risk in markets. D. a relatively riskless strategy used by companies to grow quickly.