How do firms raise external funds through indirect finance?
What will be an ideal response?
With indirect finance, funds flow from savers to borrowers through financial intermediaries such as banks.
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As the dollar depreciates relative to the Russian ruble, U.S. goods become cheaper for Russians to purchase. Therefore, in the foreign exchange market, the
A) supply curve of dollars is downward sloping. B) demand curve for dollars is downward sloping. C) demand curve for euros is upward sloping. D) supply curve of euros is downward sloping.
If the desired reserve ratio decreases, then
A) banks are able to make more loans. B) banks' desired reserves decrease and their excess reserves do not change. C) banks' desired reserves increase and their excess reserves decrease. D) banks are forced to buy fewer government securities. E) bank customers become more willing to make deposits in banks.
Advocates of flexible exchange rates claim that under flexible exchange rates, the central bank of
A) an overheated economy could cool down activity by increasing the money supply without worrying that undesired reserve inflow would undermine its stabilization effort. B) a cooled economy could cool down activity by contracting the money supply without worrying that undesired reserve inflow would undermine its stabilization effort. C) an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve inflow would undermine its stabilization effort. D) an overheated economy could cool down activity by contracting the money supply without worrying that undesired reserve outflow would undermine its stabilization effort. E) an overheated economy could cool down activity by decreasing employment and increasing output without worrying that this would undermine its stabilization effort.
Your textbooks gives several examples of quasi experiments that were conducted. The following is not an example of a quasi experiment:
A) labor market effects of immigration. B) effects on civilian earnings of military service. C) the effect of cardiac catheterization. D) the effect of unemployment on the inflation rate.