When economic or political conditions are unstable,
a. the price of gold rises to $850 per ounce.
b. the supply of gold decreases.
c. the price of gold decreases.
d. the demand for gold increases.
Answer: d. the demand for gold increases.
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Which of the following actions by the Fed would increase the money supply?
a. Increasing the required reserve ratio. b. Selling government bonds in the open market. c. Increasing the discount rate. d. Reducing the required reserve ratio.
If a bank had demand deposits of $50 million and it faced a 25 percent required reserve ratio, it would be required to have how many reserves?
a. $50 million b. $37.5 million c. $25 million d. $12.5 million
Under a fixed exchange-rate system, in order to maintain the exchange rate:
a. governments must adopt a laissez-faire economic policy. b. all trading partners must enjoy the same level of economic growth. c. currencies must be inconvertible. d. the imports of one country must equal the exports of its trading partner. e. governments must intervene in the foreign exchange market.
You own an ice cream store and are concerned that an employee may be giving generous scoops to friends and relatives and smaller scoops to some other customers. This is an example of
a. a moral hazard problem. b. adverse selection. c. behavioral economics. d. signaling.