Equilibrium, in the short run, is achieved when:
a. differences in rates of return cause investors to purchase and sell currency and thereby change the spot rate of exchange.
b. the government recognizes a problem and takes action to correct it.
c. traders adjust their expectations to match reality.
d. inflation falls to zero.
Ans: a. differences in rates of return cause investors to purchase and sell currency and thereby change the spot rate of exchange.
You might also like to view...
Suppose that there are only two types of used cars, peaches and lemons. Peaches are worth $10,000, and lemons are worth $4,000. If the market is such that only lemons are sold, then used cars are
A) experience goods and the used car market has effective signals. B) experience goods and the used car market lacks effective signals. C) not experience goods and the used car market has effective signals. D) not experience goods and the used car market lacks effective signals.
The idea that consumers will not consistently discount the future over time is known as ________
A) intertemporal choice B) tertiary inversion C) hyperbolic discounting D) antediluvian Machiavellianism
Explain what is meant by "derived demand" as it relates to factors of production
FOMC voting rights a. are given to all twelve regional bank presidents. b. rotate among the twelve regional bank presidents
c. rotate among the twelve regional bank presidents, except the president of the New York Fed, who always gets a vote. d. are all given to the president of the New York Fed, since all of the Fed's bond sales and purchases are conducted at the New York Fed trading desk.