Under a system of fixed exchange rates, excess demand for foreign currency at the official exchange rate would cause
a. the exchange rate to rise.
b. the exchange rate to fall.
c. the government to buy foreign currency from the country’s importers.
d. the government to sell foreign currency to the country’s importers.
d. the government to sell foreign currency to the country’s importers.
You might also like to view...
The purchase of government bonds by the Fed leads to a(n)
A) increase in the demand of bonds and a decrease in the price of bonds. B) increase in the supply of bonds and a decrease in bond prices. C) decrease in the demand of bonds and an increase in the price of bonds. D) decrease in the supply of bonds and an increase in bond prices.
The set of all possible bundles of goods and services that can be purchased with a consumer's income is referred to as the:
A) demand set. B) supply set. C) budget set. D) universal set.
What can income elasticity of demand tell us about the nature of a good?
What will be an ideal response?
What are some of the problems with using the leading indicators to forecast recessions? If you were a policymaker, would you rely on them?
What will be an ideal response?