For the gold standard to achieve its maximum functioning efficiency, central banks should theoretically play the "rules of the game." What are these rules?
(a) Central bank policy should tie the flow of their gold reserves to their current accounts.
(b) Central banks should "lean against the wind" and follow policies that offset gold movements.
(c) Central banks should raise interest rates as gold flows in and lower them as gold flows out.
(d) Central banks should sell securities as gold flows in and buy them as gold flows out.
(a)
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Which of the following statements is (are) correct? Keynesian economists
a. favor neither active monetary policies nor active fiscal policies to stabilize the economy. b. favor both active monetary and fiscal policies to manage aggregate demand. c. are known as noninterventionists. d. are perceived as favoring smaller, less active government policy. e. Either b or d
If the Federal Reserve decided to raise interest rates, it could
a. buy bonds to lower the money supply. b. buy bonds to raise the money supply. c. sell bonds to lower the money supply. d. sell bonds to raise the money supply.
Joe is self-employed in a store that has a rental value of $500 a month which he pays, but he can vacate the building without giving notice. His other expenses are $100 a month for maintenance. He makes $25,000 a year on net sales (total revenue minus the wholesale cost of the product). If he quit his job and worked the same number of hours elsewhere at a job he liked equally well, he estimates that he could make $20,000 a year. No one else can be hired to work in the store. Suppose that the store owner gave Joe the store. Now what should he do?
A. Work part-time. B. Keep the job. C. Quit his job. D. It is impossible to say with the information given in the problem.
Suppose that the Home country in the twosector (manufacturing and agriculture) specificfactors model has a comparative advantage in manufacturing output. What will happen to the amount of land used in producing agricultural output when trade occurs?
a. It will fall. b. It will rise. c. It will not change. d. It will first fall, then rise.