An increase in the discount rate:
A. reduces the cost of reserves borrowed from the Fed.
B. signals the Fed's desire to increase the money supply.
C. signals the Fed's desire to lend increased reserves to banks.
D. increases the cost of reserves borrowed from the Fed.
Answer: D
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Changes in which of the following factors would affect the growth of an economy?
I. Quantity and quality of human and natural resources II. Amount of capital goods available III. Technology (a) I only (b) I and II only (c) I and III only (d) II and III only (e) I, II, and III
Which is the correct match of an economic resource and payment for that resource?
a. Entrepreneurial ability and wages b. Capital and interest income c. Land and profit d. Labor and rental income
The nominal exchange rate:
A. is the price of one country's currency stated in units of another country's currency. B. is adjusted once a year and is the price at which goods are traded. C. is the price of a good in one country expressed in units of the same good in another country. D. is fixed by the central banks of countries.
You have just noticed that the dollar appreciated and you suspect that U.S. policymakers were behind this change. Which would you choose as the most likely cause of this appreciation in the real exchange rate?
A. A decrease in the money supply B. A temporary increase in government purchases C. An increase in the money supply D. A temporary decrease in taxes