If a country has a ________ exchange rate, its central bank must buy and sell its holdings of currencies to maintain a given exchange rate
A) flexible B) fixed C) floating D) all of the above
B
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When the price level in the United States falls relative to the price level of other countries, ________ will fall, ________ will rise, and ________ will rise
A) exports; imports; net exports B) net exports; imports; exports C) net exports; exports; imports D) imports; exports; net exports
In the short run, a decrease in government purchases would
a. decrease real GDP because of the multiplier effect and price level changes, but be offset somewhat by decreases in the interest rate b. decrease real GDP because of the increases in the price level and increases in the interest rate c. decrease real GDP because of the multiplier effect and increase in the interest rate, but be offset somewhat by decreases in the price level d. decrease real GDP because of the multiplier effect, but be offset somewhat by decreases in the price level and the interest rate e. not change output because of the multiplier effect; price level and interest rate changes completely cancel each other out
Which of the following explains allocative efficiency?
a. Producing the optimal quantity of an output for a society b. Producing the minimum number of goods that a society wants c. Producing goods at the lowest possible price and quality level d. Producing at a level that lowers costs and increases quality
Monetarists believe that
a. velocity is constant b. velocity is highly predictable c. there are three motives for demanding money d. changes in the money supply cause changes in velocity e. a change in the money supply can affect real GDP