All of the following are market determinants of exchange rates EXCEPT
A. changes in productivity in one country relative to another.
B. changes in the relative prices of goods and services within a country.
C. changes in real interest rates in one country relative to another.
D. changes in product preferences between countries.
Answer: B
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Classical macroeconomic theory was discredited and gave way to the first Keynesian approach as a result of
A) the collapse of the gold standard at the outset of World War I. B) the Great Depression of the 1930s. C) the wage-price controls of World War II. D) the rapid inflation of the late 1960s. E) the switch from fixed to flexible exchange rates in the early 1970s.
The main problem we had during the Great Depression, said John Maynard Keynes, was inadequate ________.
Fill in the blank(s) with the appropriate word(s).
Assume equilibrium real GDP per year is equal to full-employment real GDP. Which of the following will cause a recessionary gap?
A. a reduction in aggregate demand B. an increase in aggregate demand C. a discovery of a new raw material D. a temporary reduction in the price of oil
If the Treasury prints currency to finance an expenditure, the impact on the money supply is similar to when the Treasury borrows from the
A) banking system when it is fully loaned-up. B) banking system when it has excess reserves. C) non-bank public. D) Federal Reserve.