Refer to the graph shown. An exchange rate of $2.40 per dinar creates excess:
A. demand for dinar that will cause the dinar to lose value, unless dinar are sold by the government.
B. demand for dinar that will cause the dinar to gain value, unless dinar are sold by the government.
C. supply of dinar that will cause the dinar to lose value, unless dinar are bought by the government.
D. demand for dinar that will cause the dinar to gain value, unless dinar are bought by the government.
Answer: B
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Any combination of two goods that lies within the production possibilities frontier
A) is currently impossible to produce. B) is currently possible to produce. C) represents a more efficient combination of output than anything lying beyond the frontier. D) represents a more efficient combination of output than anything lying on the frontier.
Which asset is sometimes referred to as a bank's secondary reserves?
A) vault cash B) U.S. government securities C) repurchase agreements D) federal funds
If an economy is operating at a point inside its production possibilities curve, this reflects inefficient resource use
Indicate whether the statement is true or false
Unemployment
a) falls when households save a larger fraction of their income. b) moves in the opposite direction as real GDP. c) rises during expansions. d) decreases as production falls.