Explain exchange rate crisis
What will be an ideal response?
Exchange rate crisis typically start when participants in financial markets believe a currency may soon be devalued. Defending the parity then requires very high interest rates, with the potentially large adverse macroeconomic effects. These adverse effects may force the country to devalue, even if there were no initial plans for such a devaluation.
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Fair trade products consist of goods:
A) that are usually imported from the developing nations. B) the production of which involves child labor. C) that are available in all countries across the globe. D) that are exported only by the developed nations.
"To count as required reserves, the reserves must be on deposit at the bank's district Federal Reserve Bank." Is the previous statement correct or incorrect?
What will be an ideal response?
The level of money income below which a family is considered poor is called the:
a. bottom 20 percent of the income distribution. b. poverty income level. c. guaranteed income level. d. subsistence income level.
If demand is perfectly inelastic, then:
A. the demand curve is vertical. B. the own price elasticity of demand is infinite in absolute value. C. a small increase in price will lead to a situation where none of the good is purchased. D. None of the statements is correct.