A country, such as Argentina in 2002, that is buying its own currency to maintain a given exchange rate
a. has a balance of payments surplus.
b. has an undervalued currency.
c. has an overvalued currency.
d. need not fear a "run" on its currency.
c
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What is most likely to happen to the cost of owning and operating a golf course in a large city when the population grows?
A) The cost will decline because the course will be used closer to its capacity. B) The cost will not change as long as no attempt is made to enlarge the course. C) The cost will rise because the land will become more valuable for other purposes. D) The cost will rise if the course is privately owned but will be unchanged if the course is municipally owned. E) The cost will vary depending on the amount of competition from other courses.
The lure of _______ directs resources toward capital investments.
A. future profits B. current consumption C. high interest rates D. future interest rates
In the example of the peg between Britain and Germany, what would have been the case if Britain had allowed the pound to float and depreciate after Germany's GDP rise?
A) Britain would have suffered depreciation and a recession. B) Britain would have had to raise interest rates. C) Britain would no longer be eligible to join the new euro currency. D) Britain could have lowered interest rates and enjoyed an added boost to GDP.
The velocity of money is 4. If nominal GDP is $1,200 billion then the stock of money
A. is $300 billion. B. is $400 billion. C. is $500 billion. D. is $4,800 billion.