A _________ exchange rate policy allows monetary policy to focus on inflation and unemployment, but also raises a risk that exchange rates may sometimes make large and abrupt movements.
a. flexible
b. pegged
c. fixed
d. fragmented
a. flexible
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When a market is in equilibrium
A) everyone has all they want of the commodity in question. B) there is no shortage and no surplus at the equilibrium price. C) the number of buyers is exactly equal to the number of sellers. D) the supply curve has the same slope as the demand curve.
Which of the following is not a requirement of member banks of the Federal Reserve?
a. buy stock of the Federal Reserve Bank of its district. b. maintain sufficient monetary reserves to meet the requirements set by the Board of Governors. c. hold ten percent of their assets in short-term government securities. d. insure their deposits with the FDIC.
Under a market system of resource allocation, the most important limitations on individual freedom of action are imposed by
a. tradition b. the government c. the scarcity of resources d. the stagnation of the economy e. the rigidity of the economy's rules
When demand is elastic, if we were to lower price, total revenue would ________; when demand is inelastic, if we were to lower price, total revenue would ________.
Fill in the blank(s) with the appropriate word(s).