Suppose policy makers are pursuing a policy to fix the exchange rate. In such a system with perfect capital mobility, an open market purchase of domestic bonds by the domestic central bank will eventually result in
A) a permanent increase in the monetary base.
B) a permanent reduction in the monetary base.
C) a change in the composition of the monetary base.
D) a gradual reduction in the domestic interest rate.
C
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What will be an ideal response?
In the early stages of macroeconomic model building, the money supply is regarded as a policy ________ that is under ________ control by the Federal Reserve
A) goal, perfect B) goal, imperfect C) instrument, perfect D) instrument, imperfect
Suppose that the share of population employed in Country C is 50 percent, and that Countries C and D have the same real GDP per capita. Based on the information in the table, what share of Country D's population must be employed?CountryPopulation (millions)Average Labor Productivity ($)A1002,000B15010,000C7525,000D25050,000E9560,000
A. 100.0 percent B. 75.0 percent C. 12.5 percent D. 25.0 percent
What is meant by the “economizing problem”?
Please provide the best answer for the statement.