Suppose that the nominal exchange rate between the U.S. dollar and the Canadian dollar is 0.75 U.S. dollars per Canadian dollar. If Canada's rate of inflation is 0 percent and the U.S. rate is 10 percent, then the real exchange rate for the U.S
dollar will A) appreciate by about 9 percent.
B) appreciate by 10 percent.
C) depreciate by about 9 percent.
D) depreciate by 10 percent.
E) None of the above.
A
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Indicate whether the statement is true or false
If the Fed raises the reserve requirement on deposits from 15 percent to 20 percent, what would happen to the money supply?
a. It would decrease. b. It would increase. c. It would remain unchanged. d. It depends on the value of interest rates.
Huge increases in government spending and record low levels of unemployment during the Vietnam War era in the late 1960s led policy makers to fear that
A) the economy was slipping into a recession, which would increase unemployment. B) the economy was growing too fast, which would increase unemployment. C) the economy was slipping into a recession, which would increase inflation. D) the economy was growing too fast, which would increase inflation.
According to the figure above, which point or points correspond to full employment?
A) only point a B) only point b C) only point c D) points a and b E) points a, b, and c