By holding so much in foreign currency reserves, China is risking
A. A default on its bonds.
B. Deflation.
C. Inflation.
D. Recession.
Answer: C
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If the marginal benefit of a hot dog is greater than its marginal cost, then to increase efficiency,
A) more hot dogs should be produced. B) fewer hot dogs should be produced. C) nothing should be done if the marginal benefit is greater than the marginal cost by the maximum amount because in this case the efficient quantity of hot dogs is being produced. D) production should be halted. E) More information is needed about the price of a hot dog in order to determine if production should be increased, decreased, or not changed.
The German central bank, the Bundesbank, faced the risk of increased inflation caused by its actions to support an overvalued deutsche mark in the 1960s
Indicate whether the statement is true or false
Which of the following statements accurately describes the two measures of the money supply?
A) The two measures do not move together, so they cannot be used interchangeably by policymakers. B) The two measures' movements closely parallel each other, even on a month-to-month basis. C) Short-run movements in the money supply are extremely reliable. D) M2 is the narrowest measure the Fed reports.
In the simple Keynesian model of the determination of income, the price level is assumed to be
A) exogenous and to gradually change. B) endogenous and to gradually change. C) exogenous and to remain constant. D) endogenous and to remain constant.