If a country fixes the exchange-rate value of its currency, it will have to
a. follow a highly expansionary monetary policy in order to maintain the convertibility of its currency.
b. give up its monetary independence in order to maintain the convertibility of its currency.
c. fix its domestic interest rates in order to maintain the convertibility of its currency.
d. raise taxes in order to maintain the convertibility of its currency.
B
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Refer to the Article Summary. All else equal, a depreciation of the Chinese yuan relative to a currency such as the U.S. dollar should ________ the current account balance in China and therefore ________ the financial account balance in China
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
Natural monopolies often arise in industries where the marginal cost of adding an additional customer is high
a. True b. False Indicate whether the statement is true or false
If the Federal Reserve sells bonds, the short-run effects will be
a. an increase in the money supply and lower real interest rates. b. a decrease in the money supply and lower real interest rates. c. an increase in the money supply and higher real interest rates. d. a decrease in the money supply and higher real interest rates.
In a market for pollution, the value of pollution permits, but not the total amount of pollution, will not fluctuate over time
Indicate whether the statement is true or false