What assumptions are made to create a model to determine short-run changes in exchange rates using the asset approach?
a. Prices are completely flexible.
b. In the long run, money is neutral.
c. Prices are sticky, yet nominal interest rates are flexible.
d. Prices and nominal interest rates are sticky.
Ans: c. Prices are sticky, yet nominal interest rates are flexible.
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Based on the following information, the value of the M1 measure of the money supply is ________ and the value of the M2 measure of the money supply is ________. AssetsBillions of DollarsCurrency20Demand deposits30Money market mutual funds80Travelers' checks5Savings deposits180Other checkable deposits20Small denomination time deposits110
A. $255 billion; $445 billion B. $445 billion; $445 billion C. $75 billion; $445 billion D. $55 billion; $425 billion
Assume that, for a particular demand curve, when price rises from $50 to $60, total revenue falls from $8,750 to $7800
a. Based on this information, what is the quantity demanded at each price. b. Without calculating the coefficient of elasticity, is demand over this range elastic or inelastic? How do you know?
A player can choose among three strategies: T, M, and B. Nevertheless, strategy B is dominated by strategy T. This means that
A) strategy T is always played. B) strategy B is never played. C) strategy B will be part of a Nash equilibrium. D) strategy M is never played.
A negative demand shock would lead to a decline in both the price level and output in the short run
a. True b. False