The net flow of financial assets and similar claims is the private current account balance.
Answer the following statement true (T) or false (F)
False
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Members of the European Exchange Rate Mechanism (ERM)
A) agreed to buy and sell gold at a fixed rate. B) promised to maintain the values of their currencies within a fixed range. C) attempted to maintain a fixed exchange rate against the dollar. D) all agreed to charge the same interest rate on central bank loans.
A law that encourages market competition by prohibiting firms from gaining or exercising excessive market power is
a. a patent. b. impossible to enforce. c. an antitrust law. d. an externality law.
A commercial bank has checkable-deposit liabilities of $50,000 and a reserve ratio of 20 percent. What is the amount of required reserves?
A. $1 million B. $10,000 C. $50,000 D. $250,000
The price-misperceptions model differs from the equilibrium business cycle model in that households
a. no longer serve as providers of capital services. b. find that market-clearing prices move to equilibrium slowly. c. sometimes misinterpret changes in nominal prices as changes in real prices. d. typically face disequilibrium because prices fail to clear markets.