The rapid movement of money across borders can easily overwhelm a country's financial markets when:
A. a country has a heavily leveraged banking system.
B. the interest rates are relatively high.
C. the required reserves are relatively low.
D. a country is small.
Answer: D
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Refer to the payoff matrix below. If Best Lights and Bright Lights both know that the above game will be played exactly four times, which of the following will be the outcome of the game in each of the four periods?
A) Set High Price/Set High Price
B) Set Low Price/Set High Price
C) Set High Price/Set Low Price
D) Set Low Price/Set Low Price
If trade is mutually beneficial, then increasing trade
A. Increases the welfare of producers that compete with importers. B. Reduces income for workers in export industries. C. Makes countries less interdependent. D. Leads to increased output in export industries.
Sustained increases in the standard of living depend on
A) increases in the population. B) increases in the quantity of labor. C) increases in labor productivity. D) decreases in labor productivity. E) increases in aggregate hours.
Which of the following correctly defines the term "equilibrium"?
A) It refers to analysis that uses data to arrive at conclusions. B) It refers to a situation where all agents are simultaneously optimizing. C) It refers to an optimizing decision made by an individual economic agent. D) It refers to government intervention that efficiently allocates scarce resources.