What is the difference between a fixed exchange rate system and a managed float exchange rate system?
What will be an ideal response?
In a fixed exchange rate system, the value of the currencies of the participating countries is fixed, and in a managed float exchange rate system, the value of currencies is determined by demand and supply, with occasional government intervention.
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Open market operations involve:
a. opening the discount window b. buying stocks in the stock market. c. buying and selling government securities in the open market. d. opening new markets for commodities. e. selling failed banks to other banks.
The purchase of a virtual item from an online company with a virtual currency causes the nation's:
a. Monetary base to fall. b. M2 money supply to fall. c. M2 money multiplier to remain the same. d. M2 money supply to rise.
You are in the line to go see a movie when you suddenly realized you have lost your ticket. It would cost you $10 to buy a new ticket. Now you are deciding whether to buy a new ticket or not. Assuming you have enough money to buy a new ticket, you would always buy the new ticket as long as:
A. your reservation price for it is equal or larger than $20. B. your reservation price for it is equal or larger than $10. C. the new ticket is less expensive than the first. D. the new ticket is free.
A market surplus occurs if the quantity:
A) demanded is greater than the quantity supplied. B) demanded is less than the quantity supplied. C) demanded is equal to the quantity supplied. D) supplied is less than the quantity demanded.