Which of the following countries has gone so far as to adopt the U.S. dollar as its domestic currency?
A. Panama
B. Ecuador
C. Zimbabwe
D. All of the above
Answer: D
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Which of the following is NOT an event that causes BOTH the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve to shift?
A) a change in an economy's endowments of the factors of production B) a change in an economy's labor supply C) a temporary change in the price of a key input D) technological changes
What are the five steps by which economists arrive at a useful economic model?
What will be an ideal response?
If the interest rate on a U.S. one-year bond is 2%, the interest rate on a Brazilian one-year bond is 8%, and the currency premium on reals (Brazilian currency) is 3%,
what is the expected rate of appreciation of the U.S. dollar according to interest-rate parity? A) -3% B) 3% C) 5% D) 6%
When the Fed buys U.S. government securities, the money supply
A) increases because there is an increase in transaction deposits at the bank of the bond dealer but there is no decrease in transaction deposits at any other bank. B) decreases because there is an increase in the reserves of the bond dealer's bank. C) remains unchanged because the increase in transaction deposits at the bond dealer's bank is offset by a reduction in transaction deposits at the Fed. D) remains unchanged because the increase in transaction deposits at the bond dealer's bank is offset by a fall in transaction deposits at another bank.