To counteract the depreciation of the national currency against the U.S. dollar, the central bank of a country can intervene in the foreign exchange market. Which of the following imposes a restriction on this ability of the central banks to maintain a fixed exchange rate?
a. The central banks have a limited amount of international reserve.
b. The central banks have a limited amount of domestic currency.
c. Unrestricted sale of foreign currency will cause inflation in the domestic economy.
d. The supply of dollars is perfectly elastic in the foreign exchange market.
e. The central banks need to maintain a certain amount of its assets in the form of gold.
a
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To eliminate an AD shortfall of $100 billion when the economy has an MPC of 0.80, the government should increase transfer payments by
A. $80 billion. B. $100 billion. C. $20 billion. D. $25 billion.
Acquired comparative advantage comes from factor endowments.
Answer the following statement true (T) or false (F)
Income elasticity will be positive for:
A. all normal goods. B. all inferior goods. C. only necessities. D. only luxury goods with substitutes.
Which of the following is the best example of a vertically integrated firm?
a. General Electric, which produces light bulbs, jet engines, washing machines, and so on b. Kinko's, which has a photocopy store near many colleges and universities c. USX Corporation, which owns ore and coal mines, coke ovens, blast furnaces, mills, and foundries d. Intel, which makes computer chips for most of the computer manufacturers e. Century 21, which has real estate offices that help people sell a house in one city and buy another house in another city