A central bank with a hierarchical mandate will seek ________ as a condition of pursuing other goals
A) stable inflation
B) high employment
C) moderate interest rates
D) the approval of the legislature
E) none of the above
A
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Why does government provide educational opportunities in the form of vouchers, private subsidies, and public provision?
What will be an ideal response?
An increase in the money supply will
A) decrease the quantity of money held at every interest rate. B) increase the quantity of money held at every interest rate. C) shift the LM curve leftward. D) None of the above.
When consumers would have been willing to pay higher prices at various quantities consumed than the market clearing price, the differences are called
A) consumer surplus. B) monopoly profits. C) opportunity cost. D) deadweight loss.
Suppose the 12-month interest rate on a U.S. Treasury bill is 16 percent, and the one-year interest rate on a comparable British Treasury bill is 6 percent. The exchange rate today is $2.00 per pound. What must be the expected exchange rate at maturity for interest rate parity to hold?
a. $1.00 = 0.50 pound b. $1.00 = 0.75 pound c. 1 pound = $2.20 d. 1 pound = $1.80 e. 1 pound = $2.50