Foreign exchange reserves are
A. Used by the Federal Reserve in open market operations.
B. Holdings of foreign exchange by official government agencies.
C. Held illegally by many countries.
D. Holdings of foreign exchange by individual citizens.
Answer: B
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Refer to Figure 2-4. A movement from ________ could occur because of additional government restrictions toward allowing immigrant labor
A) X to W B) V to W C) Y to X D) W to X
If the Fed sells foreign assets, the monetary base will
A) fall by the amount of the sale, only if the Fed buys domestic bank deposits with the proceeds. B) fall by the amount of the sale, only if the Fed buys domestic currency with the proceeds. C) fall by the amount of the sale, whether the Fed buys domestic bank deposits or domestic currency with the proceeds. D) rise by the amount of the sale.
As long as wage increases do not exceed labor productivity growth rates, a stable price level should be the result
Indicate whether the statement is true or false
If the market price of a basketball is $35 and the full cost of producing it is $20, then a basketball producing firm gets producer surplus of
A. 1 basketball. B. $35. C. $20. D. $15.