Suppose the Fed had tried to keep the exchange rate at its 2001 level. In that case the Fed would have ________ dollars and its foreign reserves would have ________
A) bought; decreased
B) sold; increased
C) sold; decreased
D) bought; increased
E) None of the above is correct because the Fed cannot affect the exchange rate.
A
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A negative externality is
A) a cost realized by the producer of a good or service. B) anything that is external or not relevant to the production of a good or service. C) a cost paid for by the consumer of a good or service. D) a by-product of an activity that hurts someone who is not involved in that activity.
If there is a leftward shift of the money demand curve, which of the following should the Fed do if it wants to keep output stable?
a. Lower its interest rate target b. Sell bonds in the open market c. Wait, since output usually does not change when the money demand curve shifts d. Raise its interest rate target e. Buy bonds in the open market
Rocket Energy Drink Company buys sugar to produce energy drinks. At the end of a quarter both its inventory of sugar and its inventory of energy drinks has increased. Investment for the quarter will include
a. both the increased inventory of sugar and the increased inventory of energy drinks. b. the increased inventory of sugar, but not the increased inventory of energy drinks. c. the increased inventory of energy drinks, but not the increased inventory of sugar. d. neither the increased inventory of sugar nor the increased inventory of energy drinks.
When considering whether to migrate to a particular location, one calculates the present value of living in that location. How does one best calculate the present value of living in a location?
A. Determine the starting wage one will earn in the location. B. Sum up the annual incomes one will earn in the location. C. Subtract one's wage in the new location from the starting wage in the current location. D. Sum the annual discounted incomes one will earn in the location. E. Subtract one's wage in the current location from the starting wage in the new location.