One problem associated with the gold standard was that
A) nations gave up control of their money supply.
B) there was an incentive for individuals to hold gold at all interest rates.
C) there was no fluctuation in exchange rates.
D) nations could not determine their current account balances.
A
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If income increases by $450, we know that the change in
A. consumption, saving, and imports is greater than $450. B. consumption and saving is greater than $450. C. consumption, saving, imports, and exports is less than $450. D. consumption, saving, and imports equals $450.
When the Fed raises the federal funds rate,
A) the real interest rate is unchanged so investment and consumption expenditure are not changed. B) the real interest rate increases, thereby decreasing investment and consumption expenditure. C) the real interest rate falls, thereby increasing investment and consumption expenditure. D) investment and consumption expenditure increase, thereby raising the real interest rate. E) the real interest rate increases, thereby decreasing investment and increasing consumption expenditure.
Using the data in the above table, gross private domestic investment equals
A) $250. B) $260. C) $460. D) some amount that cannot be determined without more information.
To pay for a current account deficit, a country can
A) borrow money from abroad. B) lend money abroad. C) increase official reserves to cover the shortfall. D) transfer money from the capital account to the official settlements account.